Iran’s oil ministry’s decisions and its inattention to China’s national energy strategy has caused the country part ways with Iran oil market. Oil minister has said that Iran’s oil exports to China have almost been zeroed while according to experts, one of the main reasons behind this severance of exports is complete inattention to the demands of China and the country’s standards in terms of technical and strategic issues. Today China is the world’s second country after the U.S. in terms of oil consumption with 12.5-13m barrel per day. China which plans to become world number one economy has adopted a new strategy in the energy sector whose major axis is to secure its energy demands. So, the country signs various contracts in the oil sector with different countries and it deepens its energy links with its partners. The Chinese have underlined some issues and the most important one is to link its investments with its oil demands; hence, they invest in oil fields in countries in order to transfer the exploited oil to their country. Accordingly, one can see political power and will of Beijing in most of China’s oil contracts. So oil-rich countries, regarding this issue, have increased their cooperation with China because entering into oil market is difficult for them due to surplus oil supply and such contracts would be attractive for them as they can easily exploit their oil and guarantee their sales in the market.

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According to China’s strategy, Chinese companies have active presence in the countries from Brazil to the African and Middle East states and have signed abundant contracts. The amount of oil consumption of China in recent decade has jumped at least 5m barrels per day and it is predicted the figure would increase by 16m barrels by 2025. To provide such a huge amount of oil has made the Chinese take maximum benefits from their investments. This approach has caused the Chinese companies to enter among world giant companies while in Iran the approach to the Chinese has been overshadowed by political views and personal wills of the oil minister and it is still unknown how he thinks about such a relation. Oil minister in his recent interview has tried to show Iran-China relations in oil sector in admissible level but at the same time he has said that the Chinese have not exploited any Iran oil in May. If we accept the minister’s remarks, then it raises a question how China had the most cooperation with Iran before the sanctions era but it has totally retreated from trade with Iran in oil sector in the current era.

On should ask the oil minister: Did not the Chinese, based on their strategy, sign several agreements in the heat of toughest sanctions during the Ahmdinejad government? According to the contracts, Sinopec and CNPC companies were assigned to develop North and South Azadegan and Yadavaran fields. North Azadegan and Yadavaran fields projects were accomplished and exploited. But CNPC left the South Azadegan field project unfinished. It was expected in the current condition Iranian oil minister to start new talks with the Chinese company to bringing them back to the projects. But without paying any attention to the significance of the contract, the Chinese co. which is state-run was thrown out of the project because it was not to the benefit of the country according to the oil ministry. It was essentially a seeking excuse for annulling the contract and today this Chinese company is after taking a legal action against Iran. Now a question is on the table of the oil minister: Did not it accompany the policy that U.S. favors in the current sanctions era where the Americans are messing with Iran in all political, economic and military aspects? His answer will be interesting to be heard. Definitely now that the Japanese are on the verge of return to Iran’s market, the Chinese competition will not be less than the Japanese’s and they actually do not expect any concession and appeasement from Iran.

BY: Hamid Reza Naghashian