... Bloomberg
China Gets Cheaper Iran Oil as U.S. Pays Tab for Hormuz Patrols January 23, 2012, 12:15 AM EST
<cite>By Indira A.R. Lakshmanan and Gopal Ratnam</cite>
Jan. 12 (Bloomberg) -- China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program.
..... While China has voted for four rounds of United Nations sanctions on Iran, China’s leaders have criticized efforts to expand U.S. and European sanctions unilaterally. Chinese Vice Foreign Minister Zhai Jun said a congressional measure signed into law by President Barack Obama on Dec. 31 to penalize Iran’s central bank and block payments for its petroleum exports elevates U.S. law above international norms.
China is the biggest refiner of Iranian crude, buying 22 percent of Iran’s oil exports, according to the U.S. Energy Information Administration.
“Iran is one of China’s biggest petroleum suppliers,” Zhai said at a Jan. 11 briefing in Beijing. “China hopes that petroleum imports won’t be affected, as petroleum is needed for China’s development and for ensuring the needs of its people.”
China is seeking to diversify its Middle East oil sources. Chinese Premier Wen Jiabao embarks Jan. 14 on a six-day trip to the Middle East, including Saudi Arabia, Qatar and the United Arab Emirates.
Hedging Its Bets
During Wen’s visit, China Petroleum & Chemical Corp., known as Sinopec, and Saudi Arabian Oil Co. will sign an agreement for a proposed refinery at Yanbu on Saudi Arabia’s Red Sea coast, the Saudi state-oil company said in an e-mailed statement Jan. 8. Sinopec has agreed to a 37.5 percent stake in Aramco’s planned 400,000 barrel-a-day fuel-processing plant.
Even if it diversifies sources of oil, China is unlikely to sever commercial ties to Iran, said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University in Hong Kong.
“It has been a long-standing policy of Beijing’s to undermine U.S. influence in the Middle East even as the Obama administration is shifting its diplomatic and military pivot to the Asia-Pacific,” Lam said in an e-mail. “There is no possibility that Beijing will curtail its oil imports from Iran, which is seen by Beijing as a major ally.”
Instead, China’s oil executives are expected to demand lower prices for Iranian crude, said Mark Dubowitz, director of the Iran Energy Project at the Foundation for Defense of Democracies, an advocacy group in Washington....