Economy

Iranian Oil Imports Will Not Be Decreased, China Tells US

Iranian Oil Imports Will Not Be Decreased, China Tells US

Beijing, however, agreed not to increase purchases of Iranian crude, said the officials who spoke on condition of anonymity.

An order made by the United States to reduce oil imports from Iran has been rejected by China, reports say.

A State Department official confirmed Francis Fannon, assistant secretary of state at the US Bureau of Energy Resources, was recently in China to discuss Iranian sanctions.

Iran has repeatedly expressed dissatisfaction over Trump's decision to pull out of an worldwide nuclear deal and reinstate sanctions.

Under the 2015 pact, signed by the US, UK, Britain, China, Russia and the European Union, Tehran agreed to scale back its uranium enrichment programme.

Many U.S. shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a fall in crude prices away from 2018 highs reached between May and July.

As an original signatory, the U.S. also pledged to waive secondary sanctions as long as Iran continued to abide by the deap.

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Iran's currency plummeted this week in the lead-up to 7 August, when Washington is due to reimpose a first lot of economic sanctions following Trump's withdrawal from the nuclear deal.

Teams of USA officials have been visiting capitals around the world to try to choke off sales of Iranian oil by early November, when US sanctions are due to snap back into effect.

In Saudi Arabia, 10.29 million barrels per day were produced by the Middle East's largest power, a surprising decline of nearly 200,000 bpd, and the decline is hitting oil markets twice as hard as the decline in production amounts is announced amidst a supposed period of production increases by OPEC.

Iranian President Hassan Rouhani has warned the United States against any attempt to stop Tehran's oil trade, threatening to block the strategically important Strait of Hormuz.

U.S. officials have softened their stance after initially saying they would press allies in Europe, Asia and the Middle East to adhere to the sanctions and reduce their imports to zero.

She told CNBC with regards to the USA sanctions against Iran kicking in next week, "we're looking at tougher rhetoric and potentially tougher actions over August and September". This accounted for 35 percent of Iranian exports last month, according to ship-tracking data compiled by Bloomberg.

"If China is not participating in that, they are a pretty big consumer of Iranian crude oil that leaves global production at a somewhat higher level", added Haworth. In the same month past year shipments amounted to 415 000 bpd. This is causing investors to continue to trim net length, take profits as well as de-risk that position with the sense that oil's upside is limited unless there is material reduction in Iranian barrels.