Obama Admin. Gives China Sanctions Pass

June 28, 2012

The Obama administration may have granted China an exemption from a tough new round of Iran sanctions that went into effect today based on a fundamental misreading of the country’s motivations, congressional insiders warn.

During a conference call Thursday, senior Obama administration officials touted their success at convincing China to "significantly" reduce its oil imports from Iran. The reduction led the administration to grant China a 180-day exemption from a harsh new Iranian oil embargo meant to go into effect in the coming days.

"China has taken a 25 percent year-to-year reduction between January and May," a senior administration official stated during the press call, which was conducted on background. "The Chinese have been an important partner. … We’ll continue to work with China."

But the Communist party’s declining oil imports appear to be the result of a pricing dispute with Iran, rather than a matter of opposition to the Persian regime’s pursuit of nuclear arms.

China, which is the largest importer of Iranian oil, first clashed with Iran in January over the terms of its contract.

Soon after, Chinese imports of Iranian crude oil began to dip, the Wall Street Journal reported.

"Oil exports to China could take a dip this month [January 2012], as China International United Petroleum & Chemicals Co., known as Unipec, continues negotiating over the price of condensate, a light crude that can be used to make premium fuels such as kerosene and naphtha, from Iran's South Pars field, said the person familiar with Iran's sales," WSJ reported.

Imports dropped by 5 percent in January compared with the previous year and dropped sharply through the following months, according to statistics compiled by congressional insiders who have worked on Iran sanctions legislation.

By February, China had reduced its imports by 43 percent and then by 54 percent in March.

As the two countries began to work out their differences, China resumed purchasing Iranian oil: In April imports had decreased by only 24 percent and were down by just 2.3 percent by last month.

One senior congressional aide familiar with Iran sanctions chastised the administration for giving China a free pass.

"Chinese leaders just bested Barack Obama's State Department," the source said after the conference call. "With Chinese imports on the rise, Chinese leaders get to say they're not complying with America's unilateral policies, keep importing Iranian oil, and can freely do business with the Central Bank of Iran. They get their cake and eat it too."

The Obama administration maintains that it decided to grant China a pass on its oil embargo based on what it said is a "significant" reduction in crude oil imports.

Administration officials also expressed confidence that China would reduce its Iranian oil imports "for the remainder of 2012," though current purchasing trends appear to indicate otherwise.

However, the officials admitted during the conference call that China’s main priority might not be stopping Iran’s weapons program, stating that Beijing had reduced imports for a "variety of interests, including its own commercial decisions."

Ongoing economic sanctions have slowed Iran’s economy: Its oil exports have dropped from 2.5 million barrels to 1.5 million, as European nations begin to get serious about their own Iranian oil embargoes.