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China rejects United States demand to reduce Iran oil imports

06 August 2018

This is a blow to US President Donald Trump's efforts to isolate Iran after his withdrawal from a 2015 nuclear deal with the country, officially known as the Joint Comprehensive Plan of Action (JCPOA), they said.

Meanwhile, the tensions between Washington and Beijing is scaring hedge funds away from an increasingly volatile oil market, according to Bloomberg, with money managers' total positions in the US benchmark and Brent having slid to the lowest since 2016. That would ease concerns that China would work to undermine US efforts to isolate the Islamic Republic by purchasing excess oil.

Francis Fannon, U.S. assistant secretary of state for the Bureau of Energy Resources, was recently in China to discuss sanctions, Bloomberg said, citing a U.S. government official.

Between April and July India's oil imports from Iran has risen by an annual 40% to about 677 500 bpd, the data showed.

China's ministries of Foreign Affairs and Commerce didn't immediately reply Friday to faxed requests for comment.

The first round of U.S. sanctions on Iran goes into effect on August 6, followed by ones targeting Iran's oil exports on November 4.

The Trump administration argued that the nuclear deal, which lifted some economic sanctions in exchange for restrictions on Tehran's nuclear program, was fatally flawed because it didn't address the country's destabilizing behavior or limit its development of ballistic missiles, among other things.

The move was condemned by USA allies including the UK, Germany and France.

Repeating the pattern of past weeks, crude prices on Friday ended the week down by 0.4 percent for West Texas Intermediate and 1.5 percent for Brent, this time in reaction to China state oil major Sinopec cutting its purchases of USA product due to the trade spat between both countries.

Fears that Chinese demand could taper fuelled the pullback on Friday after state oil major Sinopec cut its purchases of USA crude.

As reported by Reuters, India's monthly oil imports from Iran grew by approximately 30% to a record 768 000 bpd in July, according to preliminary tanker arrival data obtained by Reuters.

India's July purchases of Iran's oil were about 85 percent higher in comparison to the shipments of about 415,000 bpd a year earlier, the news agency said.

The Organization of Petroleum Exporting Countries, led by Saudi Arabia, has pledged to fill any supply gaps in the market after Trump's complaints.

Brent crude futures were at $73.40 per barrel, down 5 cents from their last close.

China rejects United States demand to reduce Iran oil imports