Iran Sanctions Leave China, Russia as Winners in Trade

Ali Sheikholeslami, Anthony DiPaola and Alaric Nightingale

Sanctions punishing Iran for its nuclear program are deepening the country’s ties with China and handing Russia opportunities to sell more gasoline while hurting suppliers in Europe and India.

Iranian Oil Minister Masoud Mir-Kazemi and Chinese officials pledged for their countries to cooperate more closely in the energy industry during talks in Beijing on Aug. 6, Iran’s government-run Press TV reported. Russia’s state-controlled OAO Rosneft and OAO Gazprom Neft may step up fuel shipments to the Islamic republic this month, the Iran Commission of the Moscow Chamber of Commerce and Industry said in July.

“These countries have long-term interests in the region,” said Gary Sick, a member of the U.S. National Security Council under Presidents Ford, Carter and Reagan and the principal White House aide for Iran during the 1979-81 hostage crisis. China wants “to maintain relations with Iran for the sake of maintaining some access to the oil,” he said.

While sanctions against Iran are denting the country’s fuel imports, squeezing supplies to the country’s 73 million people, they are forcing refiners including India’s Reliance Industries Ltd. to pay higher costs to ship gasoline to more distant markets. Sanctions also translate into lost profit for Paris- based Total SA and other European refiners, which are facing their lowest returns on processing crude since December.

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