China defies US oil sanctions on Iran as domestic production flops

China will not submit to unilateral American sanctions against importing Iranian oil after reports that its domestic energy production plan has flopped.

The Trump administration on April 21 announced that as of May 2, the U.S. would increase financial pressure on Iran by suspending oil purchase waivers issued to its five main customers that include China, India, Turkey, Japan, and South Korea. 

But Chinese Middle East studies expert and former ambassador to Iran Hua Liming told the state-run Global Times on May 4 that China will not interrupt energy trade ties with Iran, because it is a "key partner of China in economy, politics and security, as well as a key supporter of the China-proposed One Belt, One Road global geopolitical initiative."

The comments bolstered previous statements by Chinese Foreign Ministry spokesman Geng Shuang that the Celestial Empire opposes unilateral U.S. sanctions and so-called "long-arm jurisdictions" that do not respect China's "lawful and legitimate" rights. 

China passed the United States as the world's largest oil-importer in January 2017 and currently imports about 10 million barrels a day (b/d) and rising fast.  That compares to about 6.6 million b/d for U.S. imports that continue to plunge due to the shale oil boom.

China's energy security plans had focused on huge investments in hydraulic fracking of shale domestic shale deposits through a joint production sharing ventures between China National Petroleum Corporation and international energy giants BP, Shell, Eni, Exxon, and ConocoPhillips to be producing 1.1 trillion cubic feet of shale gas by 2020.

But S&P suggests that challenging geology, insufficient infrastructure, and low well productivity will limit China's shale gas production to 470 billion cubic feet in 2020.  The 57-percent shortfall has caused China's foreign partners to abandon drilling by April 11.

Scrambling to cover its shale gas shortfall, China announced on May 4 that China National Offshore Oil Corporation, China National Oil and Gas Development Company, and China National Petroleum Corporation had made a $4.8-billion pooled investment to buy a 10-percent interest in Russia's massive Arctic LNG 2 project that hopes to begin producing by 2023.

The immediate energy security crisis appears to have convinced China's leadership to resist American efforts to deny Iran the energy cash flow that has allowed the rogue state to purchase $13.2 billion in arms a year, just modestly below Israel's $15.9 billion, according to a new report by the Stockholm International Peace Research Institute.

Oil prices were mostly unchanged on May 6, after President Donald Trump's tweet storm over the weekend threatening to continue the trade war with China by slapping a 25-percent tariff on up to $325 billion of China imports.  President Trump angrily warned: "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"

China will not submit to unilateral American sanctions against importing Iranian oil after reports that its domestic energy production plan has flopped.

The Trump administration on April 21 announced that as of May 2, the U.S. would increase financial pressure on Iran by suspending oil purchase waivers issued to its five main customers that include China, India, Turkey, Japan, and South Korea. 

But Chinese Middle East studies expert and former ambassador to Iran Hua Liming told the state-run Global Times on May 4 that China will not interrupt energy trade ties with Iran, because it is a "key partner of China in economy, politics and security, as well as a key supporter of the China-proposed One Belt, One Road global geopolitical initiative."

The comments bolstered previous statements by Chinese Foreign Ministry spokesman Geng Shuang that the Celestial Empire opposes unilateral U.S. sanctions and so-called "long-arm jurisdictions" that do not respect China's "lawful and legitimate" rights. 

China passed the United States as the world's largest oil-importer in January 2017 and currently imports about 10 million barrels a day (b/d) and rising fast.  That compares to about 6.6 million b/d for U.S. imports that continue to plunge due to the shale oil boom.

China's energy security plans had focused on huge investments in hydraulic fracking of shale domestic shale deposits through a joint production sharing ventures between China National Petroleum Corporation and international energy giants BP, Shell, Eni, Exxon, and ConocoPhillips to be producing 1.1 trillion cubic feet of shale gas by 2020.

But S&P suggests that challenging geology, insufficient infrastructure, and low well productivity will limit China's shale gas production to 470 billion cubic feet in 2020.  The 57-percent shortfall has caused China's foreign partners to abandon drilling by April 11.

Scrambling to cover its shale gas shortfall, China announced on May 4 that China National Offshore Oil Corporation, China National Oil and Gas Development Company, and China National Petroleum Corporation had made a $4.8-billion pooled investment to buy a 10-percent interest in Russia's massive Arctic LNG 2 project that hopes to begin producing by 2023.

The immediate energy security crisis appears to have convinced China's leadership to resist American efforts to deny Iran the energy cash flow that has allowed the rogue state to purchase $13.2 billion in arms a year, just modestly below Israel's $15.9 billion, according to a new report by the Stockholm International Peace Research Institute.

Oil prices were mostly unchanged on May 6, after President Donald Trump's tweet storm over the weekend threatening to continue the trade war with China by slapping a 25-percent tariff on up to $325 billion of China imports.  President Trump angrily warned: "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"