Iran Oil Blockage: US Imposes Sanctions on Chinese Firm

US Secretary of State Hillary Clinton has imposed sanctions against China's state-run Zhuhai Zhenrong oil company and two other companies for continuing oil business with Iran.

The sanctions have been imposed on the Chinese company, along with the Singapore-based Kuo Oil Ltd. and UAE's FAL Oil Co. Ltd., under the Iran Sanctions Act of the US.

In a notice released by the Department of State, the US government has said that it is working with other countries to maintain pressure on the Iranian government to give up its nuclear programme. The US and other western allies allege that Iran is readying nuclear weapons.

The UN Security Council Resolution 1929 adopted in June 2010 states that Tehran's revenue from the oil sector is diverted to the country's nuclear programme. In tune with the the Resolution, the US government imposes sanctions on countries which are engaged in oil deals with Iran.

All the three companies will not be eligible to obtain US export licenses, U.S. export import bank loans, and financial aid above $10 million from other US financial institutions, under the sanctions.

The US has been demanding that China should join the western allies to boycott oil from Iran. Treasury Secretary Timothy Geithner visited China this week to garner support for sanctions against Iran, but there were no assurances from China.

The Chinese government or the oil company has not reacted to the sanctions imposed by the US. The other two companies too have not reacted against the sanctions so far.

According to analysts, the move is more symbolic, as the oil company has less business interests in the US, a Reuters report has noted.

On January 12, Japan announced that it would buy less oil from Iran. The EU, South Korea, Canada and Australia have so far announced measures to block oil supplies from Iran.

Any oil company trading above $5 million with Tehran in a year would be sanctioned by the US.

Zhenrong is the largest supplier of refined petroleum to the Islamic republic. According to the US, Zhenrong supplied oil worth over $500 million to Iran between July 2010 and January 2011.

Between late 2010 and early 2011, Kuo has supplied refined oil worth more than $25 million to Iran, according to the US government.

And FAL did business of more than $70 million with Tehran in late 2010.