Trump Softens Oil Stance on Iran-China Trade Amid Pressure Talk

President Donald Trump stated on Tuesday that China would likely keep buying Iranian oil following an agreement for a ceasefire between Israel and Iran. He clarified that this did not mean the United States was easing its sanctions.

“China can continue to buy oil from Iran. I hope they will also purchase a significant amount from the U.S.,” Trump remarked in a post on Truth Social, shortly after he authorized U.S. bombings of three Iranian nuclear facilities.

Trump highlighted Iran’s choice not to shut down the Strait of Hormuz for oil tankers—a decision that would be challenging for China, which is the largest importer of Iranian oil. A senior White House official shared this insight with Reuters.

“The president consistently encourages China and other nations to import our high-quality oil instead of Iranian oil, in violation of U.S. sanctions,” the official noted.

Following the ceasefire announcement, Trump’s remarks regarding China contributed to a drop in oil prices of nearly 6%.

Should there be any relaxation of sanctions on Iran, it would signify a shift in U.S. policy after Trump announced in February his intent to reapply maximum pressure on Iran, aiming to reduce its oil exports to zero due to its nuclear program and its support for militants throughout the Middle East.

Trump enacted a series of sanctions targeting several of China’s so-called independent “teapot” refineries and port operators connected to Iranian oil purchases.

Scott Modell, a former CIA officer and now CEO of Rapidan Energy Group, commented, “Trump’s approval for China to keep buying oil from Iran indicates a return to less strict enforcement standards.”

Alongside the lack of sanctions enforcement, Trump has the authority to suspend or waive sanctions under executive order or legislative powers granted by Congress.

According to Modell, it is unlikely that Trump will waive sanctions in advance of upcoming U.S.-Iran nuclear negotiations, as these sanctions provide leverage amid Tehran’s insistence that any agreement should permanently lift them.

Jeremy Paner, a partner at the law firm Hughes Hubbard & Reed, noted that if Trump decides to relax sanctions related to Iranian oil, it would necessitate extensive coordination among various agencies. The Treasury would need to issue licenses while the State Department would have to provide waivers, which also require notification to Parliament.

‘Flashed the Glock’

China has consistently opposed what it describes as the “abuse of unilateral sanctions” by Washington. The Chinese embassy in Washington did not immediately provide comments regarding Trump’s post.

Increased Iranian oil purchases by China and other countries could create tension with Saudi Arabia, a key U.S. ally and the largest oil exporter globally.

However, U.S. sanctions have had a limited impact on Iran’s exports since Trump’s previous administration, which imposed stricter measures on Tehran.

Trump has “flashed the Glock” this year with sanctions against Chinese trading companies and terminals, but the effectiveness has been significantly less than “maximum pressure,” according to Modell.

State Department spokesperson Tammy Bruce informed reporters that Trump had outlined his desired outcomes and that the administration was dedicated to facilitating that. However, she did not specify what the process would entail.

“Clearly, we are committed to ensuring that President Trump’s vision prevails and moves this government forward. We’ll have to wait to see how that unfolds,” Bruce stated.