Having imposed sanctions on Tehran on 5 November 2018, Donald Trump announced temporary waivers for countries, including China, India, Japan, South Korea and Turkey, involved in energy trade with Iran. Now these states risk finding themselves in Washington's cross hairs.
China is Unlikely to Stop Buying Crude From Iran
"China is unlikely to stop oil imports from Iran", Adam Ni, China researcher at Macquarie University in Sydney, told Sputnik. "China will continue buying oil from Iran despite US moves to pressure China. First and foremost, China views the latest moves by the US as unilateral and lacking in legitimacy".
However, the Chinese leadership "[would] not want to be seen as bowing to US pressure", according to the researcher, especially given Beijing's longstanding relations with Tehran.
He specified that Iranian oil "is a small but still sizable portion of Chinese oil imports".
"Alternative sources of oil come possibly come from African oil-rich countries, such as Libya, Congo and Angola. In the Middle East, the beneficiaries could be Iran's rival, Saudi Arabia, and Kuwait and Iraq", he elaborated, adding that China may also import more oil from the US once their mutual trade dispute is solved.
According to the analyst, the fact is that China wants its energy supplies to be guaranteed: "China could do nothing to guarantee its Gulf oil shipments in the event of hostilities", he stressed in an apparent reference to a potential escalation of tensions in the Persian Gulf over the withdrawal of waivers.
Previously, the Islamic Revolutionary Guard Corps threatened to close the Strait of Hormuz, a strategic waterway, thus halting oil shipments from the Gulf.
"The US will push the Saudis and UAE to guarantee China's supplies under sanctions and any possible hostilities", O'Donnell suggested. "In so far as the US accomplishes this, China will generally cooperate with the new Iran sanctions".
He did not rule out that there could be guarantees "that existing Chinese investments in Iranian oil and gas will be 'grandfathered in' (permitted under sanctions)".
India Bought Iranian Oil Under Obama Sanctions, May Do So This Time
Having said that Iran's two biggest customers are China and India, James Williams, president at WTRG Economics which specialises in oil and gas price and production data analysis, said that New Delhi is likely to continue to buy crude from Tehran, regardless of US sanctions.
"In the past, under sanctions during the Obama era, they continued to buy Iranian oil and they may do so this time", Williams opined. "And I think they would basically end up being a swap for goods".
"No matter what India does, there may be the usual Trump tweets but it should have no impact either way, even if they [India] don't abide by the sanctions our relationship should stay essentially the same", Williams said.
As for China, the scholar suggested that the ongoing trade negotiations between Washington and Beijing may force the People's Republic to "at least slow [oil] imports from Iran or even eliminate them".
Trump's Withdrawal of Waivers Sent Oil Prices High
Joshua Landis, an American academic who specialises in the Middle East, highlighted that Washington's move is likely to affect Iran's oil production.
"It is going to affect it because if it can't export to Turkey, China, Japan, India, there are eight countries that had extenuating circumstances were allowed to produce more", he said.
"But if they are all closed off and if that succeeds and China goes along with it, that is going to make a major difference in Iran's ability to export", the academic said.
The question then arises whether Trump's decision will send oil prices higher.
The academic noted that one "already saw them go up by a few dollars just yesterday or today". He drew attention to the fact that besides Iran, Libya, Venezuela, Saudi Arabia and Russia had recently reduced supplies of crude.
However, according to Landis, when oil prices soar, crude producers will rush to jump at the opportunity to increase output.
"So I think there is going to be an upward pressure clearly on prices but its chances are that it will come down", he believes. "It will not be that as great as people fear because there are a lot of new productions".
The views and opinions expressed by the speakers do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.