By indicating that China could continue purchasing Iranian oil, President Donald Trump seemed to loosen long-standing U.S. sanctions on Iran on Tuesday. This move surprised international oil markets and caught his own administration officials off guard. Amid calls for an Israel-Iran ceasefire, Trump wrote on Truth Social, “China can now continue to purchase oil from Iran.”
Following significant U.S. airstrikes on multiple Iranian nuclear sites, he announced a tenuous ceasefire between the two Middle East rivals just hours before his post. Years of U.S. policy to cut off Iran’s main source of income, its oil exports, may be undermined by the action.
China u-turns to purchase Iranian oil
The response from oil markets was mild, with Brent crude rising above $68 a barrel on Wednesday, but still far below recent highs when supply concerns peaked. People familiar with the situation said Treasury and State Department officials responsible for enforcing sanctions on Iranian oil reacted with surprise to Trump’s remarks and felt uncertain about how to respond. According to one official, Treasury will keep up its strict enforcement of the sanctions for the time being.
The White House did not explicitly explain the policy change. A senior official later stated that sanctions remain in place and said the president’s speech aimed to show how recent U.S. actions had helped keep the Strait of Hormuz — a vital international oil route — open. Trump still wants China and other countries to choose American oil over Iranian supplies, the official continued.
In response, Guo Jiakun, the spokesperson for the Chinese Foreign Ministry, stated that China “will take reasonable energy security measures in accordance with its own national interests.”
Trump’s thinking behind the move
The Trump administration made the announcement as part of its broader push to restart trade negotiations with Beijing and roll back tariffs that have hurt both economies. Some analysts viewed the oil remarks as a gesture of goodwill. According to Mark Malek of Siebert, “most of us are thinking that it’s just rhetoric at this point.” Malek also added that the situation “definiteley took me by surprise”
According to someone familiar with Trump’s thinking, he may have been indicating flexibility to promote collaboration in trade talks. However, it is uncertain if his comments will change real oil flows. China, the biggest oil importer in the world, imports about 14% of its crude from Iran, although most of it gets there illegally.
Analysts note that imports have continued through shadow networks employing ships with hidden ownership and non-dollar transactions, even though official figures indicate no Iranian oil purchases since June 2022. China’s private refiners and its faltering economy depend on Iran’s discounted crude.
Trump reiterated last month that all sales of Iranian oil “must stop, NOW!” and threatened to impose secondary sanctions on those who violated the agreement. His administration has sanctioned hundreds of tankers and Chinese companies for handling Iranian oil. Buyers may remain cautious unless officials formally loosen these measures.
Featured Image Credit: Lara Jameson; Pexels: Thank You!
