According to Press TV, on Monday, US President Donald Trump threatened to escalate the tariffs fight with China into an all-out trade war, promising to impose massive duties on Chinese goods.
China has threatened to retaliate by slapping duties on several American commodities, including oil which has been flowing in greater volumes to the world’s biggest consumer of crude in recent years.
According to energy experts, a cut in Chinese purchases of US oil may boost Iran’s sales, which Washington is trying to curb with new sanctions it announced in May.
“The Chinese may just replace some of the American oil with Iranian crude,” John Driscoll, Director of Consultancy JTD Energy Services, told Reuters.
The first round of the new US sanctions are scheduled to go into effect on August 6. It would include a universal ban on Iran over buying or acquiring US dollars as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects.
However, China’s state-run companies are expected to stand their ground in trade with Iran, like what they did in 2011 when the Islamic Republic came under intensified Western sanctions.
“China isn’t intimidated by the threat of US sanctions. They haven’t been in the past. So in this diplomatic spat they might just replace US crude with Iranian oil. That would obviously infuriate Trump,” Driscoll said.
China remained the largest export destination for Iranian oil in April, with flows rising to 714,467 barrels per day (bpd), up just over 20,000 bpd from March.