China’s possible decision to increase its imports of Iranian oil could offset the negative impact of US sanctions on Iran’s oil industry, Russian Energy Minister Alexander Novak said on Thursday.
“We do not fully understand how the consumers from the Asia-Pacific region will react, and whether China will increase its imports [of Iranian oil]. There will be no change [on the market] if the flow of Iranian oil is redirected. There are a lot of uncertainties that we do not fully understand today,” Novak said on the sidelines of the Russian Energy Week..
Novak pointed out that the move would affect Chinese-US trade relations, triggering another stage of trade war between Beijing and Washington.
“These volumes are insignificant for the Chinese economy, so if there is a decision [to stop importing US oil], the People’s Republic of China will be able to shift to other sources without any problems,” the Russian minister added.
Media reported on Wednesday citing the president of China Merchants Energy Shipping Co (CMES) that shipments of US crude oil to China had been stopped amid the escalating China-US trade war.
Iran’s envoy to the Organization of the Petroleum Exporting Countries (OPEC) Hossein Kazempour Ardabili said in late September that other OPEC members will be unable to compensate for missing Iranian oil supplies on the market after US sanctionsagainst Tehran enter into force.
The United States started reimposing sanctions on Iran after withdrawing from the Iran nuclear deal in May. In early August, Washington imposed the first package of sanctions targeting Iran’s purchase of US dollar banknotes, trade in gold and other metals as well as transactions involving its national currency.
The second package is set to be introduced in early November and hit Iran’s energy sector and oil exports, among other things.