Tuesday, July 28, 2015

China and Iran's New Love Affair?

By  Courtney Bliler


The Iranian nuclear agreement has been welcomed by a number of world leaders as a new chapter in foreign relations with Tehran, largely because sanctions removal will open up new trade and investment opportunities within Iran. While the majority of the P5 + 1 aimed to isolate Iran from the global economy for the last decade, China capitalized on Iran’s estrangement to secure primary positions in both the oil and non-oil sectors of Iran’s economy. Beijing is now placed first in line for Iranian business. More importantly, in the coming years, Tehran could deepen its long-standing relationship with the People’s Republic in the military, cyber, and strategic domains. Beijing will benefit the most from the removal of sanctions. Since China became a net oil importer in 1993, Beijing has turned to Tehran to help satisfy its growing energy needs. Before UN sanctions were imposed, the Islamic Republic was China’s third largest crude oil supplier. In 2011, the People’s Republic imported a record 550,000 barrels per day from Iran. China reluctantly instituted sanctions on Iran, but oil importation continued even when sanctions were in place. In December 2013, reports even stated that the U.S.-sanctioned Zhuhai Zhenrong Corporation was negotiating a new natural gas condensate contract with the National Iranian Oil Company. According to The Wall Street Journal, Beijing’s oil imports from Iran have increased by 30 percent over the last five years and now account for 9 percent of its overall imports.