The United States is now trying to drum up support for even tougher sanctions against Iran at the UN Security Council. The key member that the US needs to convince is China, a veto-wielding member. US attempts to isolate Iran have been undermined by Chinese economic outreach to the regime. China is Iran’s principal trading partner and its main crude oil customer; Iran is China’s third largest source of crude, providing more than 10 percent of the People’s Republic's demand. The Sino-Iranian Chamber of Commerce puts bilateral trade at an annual $29 billion, or $38 billion if indirect trade through third countries is counted. Perhaps unsurprisingly, China’s public reaction to the alleged plot, China’s deputy ambassador to the United Nations, Wang Min, would say only: ‘They're still investigating, right?’
There’s no doubt that US, EU and UN sanctions have damaged Iran’s economy. David Cohen, the US Treasury undersecretary for terrorism and financial intelligence, said on October 13 that Iran faces a ‘projected loss of $14 billion a year in oil revenues through 2016,’ as a result of sanctions. China and India have both struggled to find means of paying Iran for imports of its crude. After months of not receiving payments from India, an agreement was finally reached in July whereby Iran gets through a Turkish route using a government-owned bank. The involvement of a Turkish bank has raised speculation among analysts that the United States has been turning a blind eye to some degree of sanctions flouting by its allies. It will be interesting to see whether, as part of its toughened stance against Iran, the Obama administration will be less willing to overlook transgressions.
James Brazier is an analyst for IHS Global Insight covering South Asia and specialises in the political, business and security climate of the region. Gala Riani is a country analyst for IHS, covering the Middle East and North Africa and is responsible for covering the political, security and business environment of several countries in that region.Enjoying this article? Click here to subscribe for full access. Just $5 a month.