Iran has taken steps to recover 25 million barrels of oil stuck in Chinese ports for six years. These oils were blocked due to the sanctions imposed by former US President Donald Trump.
Three Iranian and one Chinese source familiar with the issue of Iran and China told Reuters this information.
Trump returns to power on January 20 and analysts say he will again tighten sanctions on Iranian oil exports, as he did in his first term, to limit Tehran's income.
China, which does not recognize the unilateral sanctions, says that Beijing has been buying 90 percent of Iran's oil exports in recent years. Chinese refiners have saved billions of dollars by buying oil at huge discounts.
However, the market value of Iran's oil shipments currently blocked in China is 1.75 billion or 1.75 billion dollars. The oil hold-up brings to the fore the challenges Iran faces in selling oil to China.
Iran's oil ministry did not comment on the matter. When asked about the blocked oil, China's foreign ministry said that China's cooperation with Iran is legitimate. However, they did not comment on this.
Despite heavy Western sanctions, Iran has developed an active oil trade. Where shadow fleet tankers keep their activities secret. Most of the Iranian oil exported to China is identified as oil from other countries.
But this trapped oil was directly registered as Iranian oil by the National Iranian Oil Company (NIOC) and sent to Chinese ports in October 2018. It was sent through a clearance granted at the time by the Trump administration, two sources said.
NIOC stored this oil in Dalian and Zhushan ports, where they rented tanks. Renting the tanks would have given NIOC the advantage of selling oil in China or shipping oil to other buyers in the region.
In early 2019, Trump revoked that clearance. The oils have not been sold or cleared by Chinese customs and are stuck in tanks.
PDA Energy operates the oil tank in Dalian, an Iranian source said. The agency is demanding more than $450 million from Iran in oil rents accrued since 2018. Private conservation operator CGPC operates the tank in Zhushan, China.
Liaoning Port Company, which controls Dalian's PDA Energy, had no comment. Reuters tried to contact the CGPC but did not receive a response.
Iranian officials have recently stepped up talks with Chinese reservation operators amid fears that sanctions could be tightened again. An Iranian source said Iranian Foreign Minister Abbas Araghchi visited Beijing in December and some progress had been made in talks on the oil hold-up. However, no details are known about this.
In order to recover the oil, Iran has to re-ship the oil from the tanks. Then have to transfer from ship to ship by sea and re-register. An Iranian source said that there is no other way.
