US plans to strangle Iran’s economy with sanctions took a big blow on August 3 when the biggest buyer of Iranian oil, China, reportedly declined a request from Washington envoys to stop importing Iranian crude.

Two officials familiar with the negotiations over the shipments were cited by Bloomberg. Beijing, has, however reportedly agreed to not ramp up imports of Iranian oil—though the US might also soon find China refusing to buy any American oil if the growing trade battle between the US and China is not quelled.

US envoys are touring the world trying to secure agreements from as many markets as possible not to import Iranian oil. Sales of oil are indispensable to the health of the Iranian economy. Secondary sanctions aimed by the US at those who continue to buy crude from Iran are due to kick in on November 4. Prior to that a first phase of sanctions aimed at areas including Iran’s banks—the Iranian government will be banned from purchasing US banknotes—will go into effect following a White House announcement scheduled for August 6.

The second biggest buyer of Iranian oil is India. In late June, New Delhi received a visit from US Ambassador to the United Nations Nikki Haley. She told India’s Prime Minister Narendra Modi that Washington would back his country’s plan to develop the Iranian sea port of Chabahar to open up a trade route to Afghanistan that avoids its arch-rival Pakistan. The move would be a concession in return for India agreeing to cooperate with US sanctions aimed at Iran and the oil boycott.

According to shipping data reported by Bloomberg on August 4, China bought 35% of Iran’s oil exports last month. China and India import around 700,000 and 550,000 b/d of Iranian oil, respectively. Iran exports more than 2mn b/d.

“Pivotal”
Iran’s foreign minister Mohammad Javad Zarif said on August 2 that China was “pivotal” to salvaging the Iran nuclear deal, which the US unilaterally pulled out of in early May. The accord removed crippling sanctions levied against Tehran but US President Donald Trump decided to walk out of the deal and instead wage a new campaign of sanctions designed to force Iran to make concessions on its role in the Middle East. The EU, Russia and India are also committed to keeping the nuclear deal intact.

“The role of China in the implementation of JCPOA, in achieving JCPOA, and now in sustaining JCPOA, will be pivotal,” Zarif said, referring to the technical name for the nuclear deal, the Joint Comprehensive Plan of Action.`

After meeting Zarif, Chinese Foreign Minister Wang Yi said that Beijing viewed the multilateral pact as a way to secure stability in the Middle East, UPI reported.

"China always holds the view that JCPOA is a multilateral deal which is verified and approved by the United Nations Security Council and accords the common interests of all parties and the international community, which must be respected and safeguarded so as to maintain the authority of the United Nations, the effectiveness of multilateral deals and the credibility of the international rules," he was quoted by China’s official Xinhua News Agency as saying.

Iran has warned that if the US pushes ahead with its plan aimed at trying to choke off almost all Iranian oil exports it may block the Strait of Hormuz waterway in the Gulf, thus possibly preventing almost all energy exports from the Middle East from reaching world markets.

On August 3, US officials said that Iran had started naval exercises in the Gulf, with more than 100 ships deployed.

“We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways,” said US Navy Captain Bill Urban, the chief spokesman at Central Command, which oversees US forces in the Middle East.