The United States is considering cracking down on Iranian oil sales to China as it braces for the possibility that Tehran may not return to nuclear talks or may adopt a harder line whenever it does, a US official said.
Washington told Beijing earlier this year its main aim was to revive compliance with the 2015 Iran nuclear deal and, assuming a timely return, there was no need to punish Chinese firms violating US sanctions by buying Iranian crude, the official said.
That stance is evolving given uncertainty about when Iran may resume indirect talks in Vienna and whether incoming Iranian President-elect Ebrahim Raisi is willing to pick up where the talks ended on June 20 or demands a fresh start.
The US official, speaking on condition of anonymity, said Iran - which has said it will not resume talks until Raisi takes over - has been "very murky" about its intentions.
"If we are back in the JCPOA, then there's no reason to sanction companies that are importing Iranian oil," the official told Reuters this week, referring to the 2015 Joint Comprehensive Plan of Action under which Iran curbed its nuclear program in return for relief from economic sanctions.
"If we are in a world in which the prospect of an imminent return to the JCPOA seems to be vanishing, then that posture will have to adjust," the official added.
The Wall Street Journal first reported Washington was considering tightening enforcement of its Iran sanctions, notably against China.
Chinese refiners are the biggest importers of Iranian oil. China's imports of Iranian crude have averaged between 400,000 and 650,000 barrels per day this year on a monthly basis, according to data intelligence firm Kpler, with May volumes spiking to nearly 1 million bpd.
Reuters reported on Thursday that the Chinese logistics firm China Concord Petroleum Co has emerged as a central player in the supply of sanctioned oil from Iran and Venezuela.