US Strengthens Sanctions Over Iran, Targets Chinese, Emirati Firms Over Oil

On Wednesday, the US imposed sanctions on a network of Chinese, Emirati, and other firms that it accused of helping deliver and sell Iran’s petrochemical and petroleum products to East Asia, pressurizing Tehran as it aims to revive the Iran nuclear deal of 2015.

The US Treasury Department mentioned in a statement that the network of entities and people used a web of Gulf-based front firms to facilitate the delivery and sale of products worth hundreds of millions of dollars to China and other places in East Asia from Iranian firms.

Washington has been increasingly targeting China-based firms over exporting Iran’s petrochemicals as the chances of reviving the existing nuclear pact have dimmed.

Last week in Doha, Qatar, an indirect discussion between Washington and Tehran ended without a breakthrough regarding how the deal could be salvaged, under which Iran had reined in its atomic mission.

Oil Trade
Image for representation purpose only

In 2018, Donald Trump abandoned the pact. He reimposed some sanctions, spurring Iran — which said that its program is exclusively meant for peaceful purposes — to start violating the atomic limits of the deal.

Among those that the Treasury Department designated was the Iran-based firm named Jam Petrochemical Company. It faced accusations that it had exported petrochemical products to firms all through East Asia, many of which were sold to a US-sanctioned firm for shipments to China.

Jam did not respond to a request for comment immediately.

The UAE-based firm named Edgar Commercial Solutions FZE was also targeted. According to the Treasury, it bought and exported petrochemical products from some of the sanctioned Iranian firms for shipments to China.

Washington reported that the firm used Lustro Industry Limited, a Hong Kong-based front firm designated on Wednesday, to hide its involvement in bulk purchases of petrochemical and related products.

Ali Almutawa Petroleum and Petrochemical Trading LLC were reportedly accused of acting as a front firm for the targeted Hong Kong-based major Triliance Petrochemical Co. Ltd.

Over the past two years, China-based refineries have been buying sizeable amounts of Iranian oil despite US sanctions on its oil exports. Oil is the Iranian economy’s lifeblood, and China’s imports have kept Tehran afloat.

A former Treasury official, Brian O’Toole, reportedly said that with Iran’s hesitance to return to the nuclear deal, he expects Washington to lean heavily on China as that was the point of leakage in the sanctions regime.

Wednesday’s move has frozen US assets of the designated ones and bars Americans from dealing with them. Those who continue dealing with the targeted people and entities can also be hit with sanctions.

On Wednesday, the US State Department also targeted a Vietnam-based firm named Truong Phat Loc Shipping Trading JSC and Singapore’s Everwin Shipmanagement Pte. Ltd. for dealing with the transport of Iran’s petroleum products. Three Iranian entities were also targeted as part of the action.

References: Real Clear Defense, Middle East Online, Peoples Dispatch

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