China, the EU and other countries are resisting the renewed intensification of the US oil embargo on Iran. US President Donald Trump wants to completely prevent oil exports from the Islamic Republic from the beginning of May and threatens buyers with sanctions. Affected are China, India, Japan, South Korea, Turkey, Italy and Greece.
The Chinese government formally protested against the plans. A Foreign Ministry spokesman said the decision will contribute to unrest in the Middle East and international energy markets. China is the largest buyer of Iranian crude oil, which accounts for six percent of imports. Some of the country's major refineries are focused on the specifics of Iranian oil.
According to the authorities, South Korea wants to send a delegation to Washington immediately in order to benefit even longer from exemptions. The country hopes to achieve exceptions beyond May. There may be talks about it this week.
The lifting of the exemptions was regrettable, said a spokeswoman for EU foreign policy Federica Mogherini. American action threatens to jeopardize the agreement to prevent an Iranian nuclear bomb.
Iran sharply attacked the United States and spoke of a "serious mistake". Iranian oil minister Bidschan Sanganeh said in the news agency IRNA in the parliament that the US politicized the oil and used it as a weapon in a difficult market phase. The US would not achieve its goal of bringing Iran's oil exports down to zero.
However, since the US imposed sanctions on Iran, its oil exports have fallen from more than 2.5 million barrels per day to less than a million. The oil business is the government's main source of income in Tehran.
Saudi Arabia - one of Iran's arch-enemies in the region - welcomed the US decision. This is a necessary step to end Iran's destabilizing policies, said Foreign Minister Ibrahim al-Assaf. The US hopes that Saudi Arabia will compensate for possible production losses on the market. Trump had canceled the international nuclear deal with Iran last year and is on a confrontational course with the country since then.
Special purpose vehicle is not yet operational
With their economic sanctions against Iran, the US wants to increase the pressure on the government in Tehran, which they consider a troublemaker and supporter of terrorism in the region. Europeans are also very critical of Iran's role in the region. However, they want to get the nuclear agreement with the country. Iran had been promised the lifting of economic sanctions for abandoning its nuclear program.
Attempts by EU countries to overturn US economic sanctions have not been successful so far. EU diplomats confirmed on Tuesday that a special purpose vehicle set up by France, Germany and the United Kingdom was not yet operational. They should actually be able to handle the payment transactions in Iran transactions, if private banks because of imminent US penalties to declare no longer ready.
For example, Iran could continue to deliver oil or other products to Europe. The money would then not flow through banks to Iran, but to European companies, for example, sell drugs, food or industrial goods in Iran.