US House passes Iran-China crude sanctions
The US House of Representatives overwhelmingly passed a bill on Monday targeting China’s purchase of Iranian crude oil, as per a Bloomberg report on Tuesday.
Iran relies heavily on China for oil exports. A whopping 80 per cent of their daily exports, roughly 1.5 million barrels, end up at independent Chinese refineries nicknamed “teapots,” according to a report.
This action is part of a response to recent tension between Iran and Israel. The bill, known as H.R. 5923 or the Iran-China Energy Sanctions Act of 2023, broadens secondary sanctions against Iran to encompass all transactions involving Chinese financial institutions and sanctioned Iranian banks for the purchase of petroleum products. It also mandates yearly evaluations of the involvement of Chinese financial institutions in activities subject to sanctions.
Introduced by New York Republican Representative Mike Lawler, the bill specifies that any transaction conducted by a Chinese financial institution for the purchase of oil from Iran will be classified as a “significant financial transaction” subject to sanctions.
This legislation, which received unanimous approval from the House Financial Services Committee, is part of a series of bills related to Iran that were expedited for consideration on Monday due to bipartisan support.
If implemented, these sanctions could potentially lead to a rise in gasoline prices of up to 20 cents per gallon, as indicated in a note to clients by consulting firm ClearView Energy Partners.
