Slump in Oil Price to Intensify Sanctions Pressure
IRAN NEWS ECONOMIC DESK
TEHRAN – Chairman of Iran-China Joint Chamber of Commerce Majid-Reza Hariri says China’s oil imports from Iran have slumped in the first two months of 2020, adding that the slump in oil price can intensify the pressure of sanctions on Iran.
Speaking to Eghtesadonline, Hariri said that statistics show that China has increased its oil imports from Russia and Saudi Arabia by 26 and 11 percent respectively, while Iran’s oil sales to China have dropped by 81 percent in the same period.
He said that it seems statistics reported by Reuters are not reliable because it raises this question how China has increased its oil imports from Saudi Arabia and Russia and decreased its imports from Iran while the country is involved in fight with the outbreak of Coronavirus.
Hariri said currently one cannot rely on such statistics on China’s oil imports from Iran and one should wait for the release of figures from the reliable global related organizations.
He reiterated that since the beginning of 2020 and the outbreak of the Coronavirus, demands for energy and transportation have extremely decreased and it has drastically affected the oil price. He noted in such a condition one cannot expect China to increase its oil imports.
On Iran’s oil exports to China, he said after the JCPOA, Iran’s oil exports to China witnessed a turning point and its daily exports to China reached 580,000 barrels per day but the figure dropped to 260,000 barrels per day last year, reiterating that in the current condition and due to sanctions and lack of access to the statistics, one cannot rely on the reported statistics.
Hariri admitted that the U.S. restrictions on Iran oil sales are very extensive and any purchaser of Iran’s oil could face heavy fines from the U.S., noting that purchasing Iran oil is very risky. He stated that it is natural when the oil price soars, there are some companies which rush to buy oil by getting discounts and ready to accept the risk of fines but when the oil price is cheap, the amount of discount and profit falls and nobody is ready to accept the risk of buying Iran oil.
He underlined that unfortunately by the slump in oil price, the pressure of sanctions on the country will increase because Iran cannot give discounts to allure purchasers.
Hariri said one should take into consideration that most big Chinese oil companies have considerable trades with the U.S. or their shares are in the U.S. stock market and nobody can expect them to ignore their interests in trade in the U.S. instead to purchase Iran oil.
He concluded that one cannot expect that improvement of Iran-China ties to increase the level of Iran’s oil exports to China, reiterating that as long as sanctions are, Iran cannot rely on oil sales.
