As Empire Declares No More Iranian Oil for India and China, the Two Ought to Team Up

Best way would be figuring a way to pay without involving US currency and banks

The two are already working together to set up an anti-OPEC oil buyers’ club

China’s stance vis-a-vis the US sanctions against Iran’s oil exports is evolving. These are early days. Quite obviously, the Chinese assessment that Iran is not going to wilt under US pressure gives a realistic picture. But it means that there is a long haul ahead and India needs to do some creative thinking. In the improved climate of Sino-Indian relations, a window of opportunity is opening for New Delhi to take a coordinated approach with Beijing. 

No sooner than the Trump administration announced in a statement on April 22 its decision that it will not extend the exemption period beyond May 2 for countries buying oil from Iran — so-called “waiver” — the Chinese Communist Party tabloid Global Times came out with an editorial acknowledging that the US decision poses a “tough choice.” 

China is the biggest importer of Iranian oil. The Global Times editorial blasted Washington for this “typical manifestation of unilateralism and hegemony” and weighed in on China’s policy options. The editorial offered the following advice: “We think China should clarify its interests and principles surrounding the purchase of oil from the Middle East nation and strive to minimize the loss to China’s national interests.” 

That is to say, first, China should no doubt “oppose the hegemonic approach of the US but it can’t take the lead in confronting the US on issues involving Iran. ” China will push back at the US by rallying world opinion against its Iran sanctions, but will not take a confrontationist approach.  

Second, “Beijing needs to coordinate with other major powers to respond to US sanctions against Iran… There is a need to strengthen coordination among countries. If the issue can be dragged, then let it drag. Otherwise, the issue can be modified. If it cannot be modified, let it be dealt with on a case-by-case basis.” 

Third, “The operational safety of Chinese enterprises should be given priority and they have the right to continue to cooperate with Iran or withdraw, keeping in mind the situation on the ground.” The editorial sums up: “China does not want to have a showdown with the US over Iran, nor can Beijing just let Washington do what it wants… we cannot disregard principles or interests. This is a time to test wisdom.” 

However, an editorial by the government-owned China Daily on April 23 was more forthright: “Major importers of Iranian oil, China included, have the legitimate right to have normal business ties and conduct trade with Iran, including importing oil from it, should they so choose. The Chinese government is committed to safeguarding the legitimate rights and interests of its enterprises and willing to play an active and constructive role in promoting the stability of the international energy market.” 

Significantly, China Daily also hinted at willingness to make coordinated moves with other affected countries such as India. 

China has skirted US sanctions against Iran before. This time around too, the likelihood of that happening is being discussed by western analysts. China will find the back door, inevitably. Apart from ship-to-ship transfers of oil, China also has the option to continue to buy some Iranian crude through the banks in China that are already under US sanctions.

The US-China trade talks do not complicate Beijing’s policy calculus on Iran oil. The trade negotiations envisage US exports of oil / LNG to China worth tens of billions of dollars. (The Wall Street Journal reported in March that in a move that would be announced as part of a broader US-China trade deal, China’s state-owned China Petroleum & Chemical Corp., known as Sinopec, will agree to a long-term contract to buy about $18 billion of liquefied natural gas from Cheniere,) This eases the US pressure on China.

On the contrary, the pressure is much higher on India, which meets 80% of its oil demand through imports. Iran used to be the third largest source of supply till the US butted in. The “waiver” allowed India to import 1.25 million tonnes of oil from Iran per month (which itself meant a 30% reduction in the level of imports). 

Most important, India could avail of concessional terms, which meant a saving of around a quarter of combined costs due to favourable conditions such as prices, transportation and insurance. Equally, the rupee payment mechanism worked to India’s advantage. 

India has to pay Iran in rupees for oil imports and money is deposited in a special account in India, which Iran uses to purchase humanitarian supplies such as rice and medicines from India. In essence, it was barter trade that committed Iran to buy Indian products, creating export earnings for Indian business.

President Trump is notoriously tight-fisted and will never compensate India for all this financial loss. On the other hand, he hopes to take the opportunity to expand US oil exports to India, which are not based on attractive trade terms. (Besides, why should India want Trump to navigate its energy security?)  

Suffice to say, with the expiry of the “waiver” on May 2, India’s oil import costs (and its US dollar payouts) will rise, and its export revenue will decrease. India’s economic growth and exchange rate’s stability will come under great pressure. The expert opinion uniformly warns that the US sanctions against Iran will push up international oil prices, thereby increasing India’s overall oil import bills. Washington claims to be generous in leaving India-Iran cooperation over Chabahar port out of the purview of the sanctions. But the US sanctions will in due course severely stymie cooperation between India and Iran over Chabahar.

The question must be frontally asked: What are the US’ intentions toward India? New Delhi has reason to be worried about Washington’s real interests, long-term strategy and the uncertainty in ties with the US. The US’ interests and strategy appear to narrow down to using India to contain China. 

Mike Pompeo has rushed to claim credit for the blacklisting by the UN of Masood Azhar. Sections of the Indian media are beside themselves with joy. But the same man went into hiding a couple of weeks ago when EAM Sushma Swaraj telephoned him in Washington seeking flexibility in the US sanctions against Iran oil. 

According to media reports, EAM said India should be allowed to import Iranian crude for some more time without being impacted by US secondary sanctions, as the general election is underway in the country, and that the next government with a fresh mandate will take a final call on this issue. 

But Pompeo ducked, pleading helplessness — only to resurface from hiding ten days later on May 1 with the astounding claim that his boys got China to lift the block on Azhar. What to make out of such friends?

Unfortunately, the government is waffling by claiming it is ready to deal with the impact of US sanctions against Iran by getting extra supplies fom other oil producing countries to compensate for loss of Iranian oil. The matrix is not about the availability of oil — as explained above — but about the huge economic costs. Simply put, India is called upon to underwrite Trump’s maverick Iran policies. 

From the Indian perspective, what matters most in the coming period will be the scope to create a trading bloc with China that would allow the two countries to buy Iranian oil without going through the US banking sector. 

Source: Indian Punchline

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John C Carleton
John C Carleton
3 months ago

How about both os them tell the Israhell citizens and the Israhell firster zionist “christians”, running USA/Washington DC, to take a long walk off a short pier?

Who Iran sells their oil to, and who buys Irans oil is absolutely none of the pedophiles of DC’s business.

David Bedford
David Bedford
3 months ago

here here!

DarkEyes
DarkEyes
3 months ago

IMO:
The Donald, his sil (son in law) and Donald’s bossom friend BiBi together with Mr. Rothschild decided they all go in the Syrian Golan Heights oil and gas business. Big profits for the Boys.

The task for The Donald is:
– To scare off especially China and Inda buying oil from Iran, (there are other
countries he does not want them to buy oil from Iran);
– To threaten Venezuela with a Regime Change invasion if Mr. Maduro is not
handing over Venezuela’s oil and other resources to The Donald and his
zio-friends.

The task for zionist-globalist-crypto-joo Jared (sil) is:
– to do his best to encourage S-Arabia and zio-BiBi to genocide the
Palestinians so the road to the Mediteranean coast is free for planned oil/gas-
pipeline from Syrian Golan Heights to the Palestinian coast and from there to
stupid and backboneless Europe.

The task for alleged warcriminal zionist-globalist and future king BiBi of the planet is:
– To threat as many countries in Europe to make contracts with zio-Israel
for delivering oil and gas (stolen) from Syrian Golan Heights;
– To do his best to activate his AIPAC Government for US, to press The Donald
harder to do his best to make EU cut deliverance of Russian oil/gas to
Europe and instead by the Boys, who are then in a kind of “Happy Family”
mood for never ending business success;
– If The Donald has no joy with his task, BiBi will direct his “problem shooters”
to European countries to solve this problem ASAP.

This is a way, IMO, Europe will be tackled to buy gas and oil from zio-Israel.

chris chuba
chris chuba
3 months ago

If they do not resist the U.S. then there is a good chance that the U.S. will blunder us into a war.
Scott Ritter proposed a very plausible way in how this would escalate, https://www.theamericanconservative.com/articles/what-if-iran-retaliates-and-shuts-the-strait-of-hormuz/
If the U.S. was able to block Iranian oil sales through a global embargo, Iran would invoke UNCLOS to deny U.S. ships access to the Persion Gulf, a totally lawful action. The U.S. filled with Hubris wouldn’t be able to resist the urge to show the world that our navy can go anywhere it damn well pleases would force its way it. Any conflict in that area would then have a disastrous impact on tanker traffic and oil prices.

* edit * not certain if Iran could lawfully claim to deny access to the Persian Gulf to non-UNCLOS members as Ritter claims because I think they have to split the lane with Oman but still least bad option for them if U.S. succeeds in global embargo.

Quite frankly, Iran has its best chance scrapping with the U.S. navy in the narrow confines of the Persian Gulf, this isn’t the 1980’s. Our pride will lead to our own undoing.

jm74
jm74
3 months ago

If this bullying and attempt to rule globally by the US is not stopped then eventually nations will have to apply to the US for a license to operate, sell or purchase goods and commodities and the right to live.

Séamus Ó Néill
Séamus Ó Néill
3 months ago

Nobody wants WW111 but bowing to American and Jewish bullying has gone on long enough. America is not super powerful , it is inanely stupid and full of goose shit. It contains only 4.7% of the worlds population ( and most of the worlds idiots ) but is allowed to run amok all over the planet. I know that , slowly and surely , China , Russia and Iran are dumping the dollar and that eventually the demise of the dollar will be the demise of America , but it’s taking too long, If the US is not hit a good hard slap ,like all bullies need , it will become more brazen in all it’s illegal actions….look at Venezuela. It has some crazy notion of its exceptionalism and it’s divine right to rule over the entire planet. It is around $230 trillion in debt and that is its achilles heel. Countries should start dumping American stocks and bonds…anything propping up that corrupt satanic regime and make it pay its own way in the world. Its 800+ bases would soon have to close and its warmongering would soon stop !

Anti-Empire