AP NEWS

Key Chinese bank signals it could stop business with Iran ahead of U.S. sanctions

October 25, 2018

As Washington prepares to reimpose harsh sanctions on Tehran’s exports of oil, a major Chinese bank involved in the Islamic Republic’s oil trade has reportedly announced it will stop accepting payments from Iran.

The state-owned Bank of Kunlun is controlled by the China National Petroleum Corporation (CNPC) and transacts an estimated $1.5 billion worth of Iran-China oil purchases every month. China is the Islamic Republic’s largest oil customer.

According to a Reuters report, four sources familiar with the matter said Kunlun will stop processing yuan-denominated Iranian payments as of Nov. 1, three days before Washington reimposes sanctions targeting Iran’s energy and financial sectors in a bid to crush its ability to export oil.

Since May, when President Trump withdrew the U.S. from the 2015 multilateral deal that eased global sanctions in exchange for curbs on Iran’s suspect nuclear programs, Washington has worked to thwart the Islamic republic’s aggressive behavior across the Middle East by reimposing sanctions. The Nov. 4 sanctions will block countries who buy Iranian oil from access to U.S. markets and financial institutions.

The sanctions have proven a major sticking point between Washington and Beijing, which was a signatory to the 2015 Iranian nuclear deal. Chinese officials have previously said they would not stop buying Iranian oil despite mounting pressure from the Trump administration.

On Thursday, Iranian media was reporting that neither the Bank of Kunlun nor the CNPC had officially responded to inquiries about the validity of the Reuters report.