United States' requests to halt the acquisition of oil from Russia and Iran face opposition from China
China continues to purchase oil from Iran and Russia, despite U.S. pressure, due to its critical need for these energy supplies to fuel its growing economy.
According to reports, China imports more than 1 million barrels of Iranian oil per day, making it the largest customer for Iran's oil exports. Russia also supplies about one-fifth of China's total oil, with recent imports increasing significantly.
Several reasons explain China's persistence in maintaining these oil imports.
Energy Security and Economic Needs
China heavily relies on Iranian and Russian oil as major suppliers, given the scale of its economy and industrial demand. Cutting off these sources would create significant energy shortages or higher costs for China.
Geopolitical and Strategic Interests
China balances its global ambitions with economic pragmatism. It rejects U.S. demands partly to assert its sovereignty and because it views the pressure as an attempt to limit its economic rise and leverage. China also opposes disruptions to critical oil transit routes like the Strait of Hormuz, vital for global oil supply.
Trade Negotiations Complexity
While the U.S. is pressing China to cut oil purchases from Russia and Iran as part of trade talks, Beijing is unlikely to fully halt them but may consider minor reductions as a goodwill gesture during complex ongoing negotiations.
Limited U.S. Leverage
Despite sanctions and tariffs, the U.S. has struggled to force changes as Iran and Russia continue exporting significant oil volumes to China, sometimes with covert shipping methods.
In a recent development, Sen. Lindsey Graham introduced a bill that would authorise the president to impose tariffs as high as 500 percent on countries buying oil from Russia. However, Gabriel Wildau, managing director of Teneo, doubts President Trump would actually deploy the 100 percent tariff.
Trade negotiations between the U.S. and China are ongoing, and the U.S.'s demand to stop buying oil from Iran or Russia may not be a deal-breaker, given Trump's desire for a headline-grabbing deal with Xi.
However, if the U.S. imposes tariffs, China has vowed to fight back. Tu Xinquan, director of the China Institute for the World Trade Organization Studies, said China will fight to the end if the U.S. imposes tariffs.
In the midst of these tensions, China spoke out against closing the Strait of Hormuz, a critical oil transit route. The Chinese Foreign Ministry said coercion and pressing will not achieve anything and that China will firmly defend its sovereignty, security, and development interests.
Beijing may use the oil purchases as a negotiating tool with the U.S., as it continues to navigate the complex web of global politics and economics.
- China's oil imports from both Iran and Russia, despite U.S. pressure, can be attributed to its critical need for energy supplies, geopolitical strategic interests, and trade negotiation complexities.
- While trade negotiations continue between the U.S. and China, China may use its oil purchases from Iran and Russia as a negotiating tool, asserting its sovereignty and showcasing its resistance to coercion and external pressure.
