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China exempted from sanction on Iranian oil

- The Washington Times - Thursday, June 28, 2012

The U.S. added China to the list of nations exempted from sanctions against Iran on Thursday, citing an effort undertaken by Chinese authorities to significantly reduce their crude oil purchases from the Islamic republic.

The exemption, announced by Secretary of State Hillary Rodham Clinton, arrived as a law empowering U.S. authorities to block U.S. market access from any financial institutions doing oil-related business with Iran's banks went into effect.

Granting an exemption to China avoids a potentially contentious stand-off between U.S. and Chinese authorities.

The sanctions law, signed by President Obama in December, includes a loophole that allows his administration to provide exemptions for institutions in nations that are measurably cutting the level of crude they buy from Iran.

Eighteen nations had qualified for the loophole since March.

"Today, I've made the determination that two additional countries, China and Singapore, have significantly reduced their volume of crude oil purchases from Iran," Mrs. Clinton said, adding that the sanctions will now not apply to their "financial institutions for a potentially renewable period of 180 days."

"A total of 20 world economies have now qualified," Mrs. Clinton said. "Their cumulative actions are a clear demonstration to Iran's government that Iran's continued violation of its international nuclear obligations carries an enormous economic cost."

Exemptions for South Korea, Turkey and India were announced June 11, and previously were granted to Japan and nations across Europe.

The sanctions aim to pressure Iran to stop enriching uranium and open its nuclear program for inspection.

Before the sanctions law was enacted, China and India together had been buying about 860,000 barrels of Iranian crude oil a day.

Mrs. Clinton cited International Energy Agency statistics indicating a drop in Iranian crude oil exports from an estimated 2.5 million barrels a day in 2011 to a current rate of roughly 1.5 million barrels per day.

"In real terms, [that] means almost $8 billion in lost revenues every quarter," Mrs. Clinton said.

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