US to boost pressure on China to stop importing Iran oil, envoy says

The US said it will increase pressure on China to stop buying Iranian oil, as the White House seeks to enforce sanctions aimed at curbing the Islamic Republic’s nuclear activities.

“China is the main destination of illicit exports by Iran” and talks to dissuade Beijing from such purchases will be “intensified,” Robert Malley, the Biden administration’s special envoy for Iran, told Bloomberg Television on Monday.

The US tightened sanctions on Tehran and its petroleum exports in 2018 after pulling out of an agreement aimed at containing its atomic program. In response, Iran has ramped up uranium enrichment.

Iranian shipments of crude oil and refined products have surged in recent months. Much of the oil appears to be heading to China, the world’s biggest importer, and disguised as coming from Malaysia.

The Persian Gulf country’s exports climbed to about 1.4 million barrels a day last month, the highest in around four years, according to Vortexa Ltd., a shipping analytics firm.

Malley denied the US is — as some energy traders speculate — happy for Iranian oil to be on global markets as long as it helps keep prices in check.

Brent crude surged to almost $130 a barrel in the wake of Russia’s attack on Ukraine last year, causing a sharp rise in US gasoline prices and hurting President Joe Biden politically. Brent has since dropped to $88, but many analysts, including those at Goldman Sachs Group Inc. and Morgan Stanley, forecast that it will climb above $100 again later this year.

“No, we’re not fine with it,” Malley said of Iran’s increasing oil exports. “Can we enforce our sanctions perfectly? No. But we’ll do everything in our power to make sure they’re enforced.”

He reiterated comments from other US officials that talks with Iran on reviving the nuclear agreement from 2015 have largely broken down. The US is concentrating on stopping Iran from using violence against protesters at home and on preventing it from supporting Russian operations in Ukraine, Malley said.

“Our focus has shifted to Iran killing its own citizens and what we can do to counter that, and to Iran assisting in Russia’s killing of Ukrainian citizens and what we can do to deter and stop that,” he said. “The nuclear deal has not been on our agenda.”

© 2023 Bloomberg L.P.

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