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Oil politics: Saudi and Iran take opposite position on OPEC oil output targets

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Saudi and Iran, even while fighting each other in order for dominating the West Asia region, seem to have decided to take their fight forward regarding effecting changes in oil output targets.

The Organization of the Petroleum Exporting Countries (OPEC) is one of the forums where both could coordinate their action to stabilize West Asia. But unfortunately they continue to orchestrate their enmity even there. Tensions between the Sunni-led kingdom and the Shi’a Islamic Republic have been the highlights of several previous OPEC meetings, including in December 2015 when the group failed to agree on a formal output target for the first time in years. This time around, strains were less acute, however, as new Saudi Energy Minister Khalid al-Falih showed Riyadh wanted to be more conciliatory and his Iranian peer Bijan Zanganeh kept his criticism of Riyadh to an unusual minimum.

OPEC is pumping 32.5 million barrels per day (bpd), which would give Iran a quota of 4.7 million bpd – well above its current output of 3.8 million, according to Tehran’s estimates, and 3.5 million, based on market estimates.

OPEC set for another showdown between rivals Saudi Arabia and Iran when it met on June 02 in Vienna with Riyadh trying to revive coordinated action and set formal oil output target but Tehran rejecting the idea. The Gulf Cooperation Council sought coordinated action at the meeting, a senior OPEC source said, referring to a group combining OPEC’s biggest producer Saudi Arabia and its Gulf allies Qatar, Kuwait and the United Arab Emirates. In a rare compromise, OPEC also decided unanimously to appoint Nigeria’s

Saudi Arabia and its Gulf allies had tried to propose OPEC set a new collective ceiling in an attempt to repair the group’s waning importance. But Thursday’s meeting ended with no new policy or ceiling amid resistance from Iran.

Since Saudi is eager to maintain the conflict with Iran for some obscure reasons, any agreement between Riyadh and Tehran would be seen as a big surprise by the market, which in the past two years has grown increasingly used to clashes between the political foes as they fight proxy wars in Syria and Yemen. Saudi Arabia effectively scuppered plans for a global production freeze – aimed at stabilizing oil markets – in April. It said then that it would join the deal, which would also have involved non-OPEC Russia, only if Iran agreed to freeze output.

Several OPEC sources said Saudi Arabia and its Gulf allies would propose to set a new collective ceiling in an attempt to repair OPEC’s waning importance and end a market-share battle that has sapped prices and cut investment. New Saudi Energy Minister Khalid al-Falih was the first OPEC minister to arrive in Vienna this week, signaling he takes the organisation seriously despite fears among fellow members that Riyadh is no longer keen to have OPEC set output. “There could be shorter-term situations in which, in our view, OPEC might intervene and yet other situations — such as long-term growth of marginal barrels — in which case it should not,” Falih told Argus Media ahead of the meeting.

At its previous meeting in December 2015, OPEC failed to set any production policy including a formal output ceiling, effectively allowing its 13 members to pump at will in an already oversupplied market. As a result, prices crashed to $27 per barrel in January, their lowest in over a decade, but have since recovered to around $50 due to global supply outages. Those include declining output from U.S. shale producers badly hit by low prices but also forest fires in Canada, militant attacks on pipelines in OPEC member Nigeria and declining output in Venezuela, also a member of the group.

Until December 2015, OPEC had a ceiling of 30 million barrels per day (bpd) – in place since December 2011, although it effectively abandoned individual production quotas years ago. OPEC currently produces around 32.5 million bpd. Any ceiling below that number would represent an effective cut. “One of our main ideas (is) to have a country quota. But I don’t believe at this meeting we can reach agreement for this,” Zanganeh said, adding that Iran was producing 3.8 million bpd and would soon reach pre-sanctions levels of 4 million bpd.

Tehran has been the main stumbling block for the OPEC (Organization of the Petroleum Exporting Countries) to agree on output policy over the past year as the country boosted supplies despite calls from other members for a production freeze. Tehran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran’s nuclear program. Iranian Oil Minister Bijan Zanganeh said Tehran would not support any new collective output ceiling and wanted the debate to focus on the more radical idea of individual country production quotas. “An output ceiling has no benefit to us,” Zanganeh told reporters upon arriving in Vienna and before seeing any fellow OPEC ministers.

The market has grown increasingly used to OPEC clashes over the past two years as political foes Riyadh and Tehran fight proxy wars in Syria and Yemen. Saudi Arabia effectively scuppered plans for a global production freeze – aimed at stabilizing oil markets – in April in the Qatari capital of Doha. It said then that it would join the deal, which would also have involved non-OPEC Russia, only if Iran agreed to freeze output.

Tehran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran’s nuclear program. Zanganeh said Tehran would not support any new collective output ceiling and wanted the debate to focus on individual-country production quotas, effectively abandoned by OPEC years ago. “Without country quotas, OPEC cannot control anything,” Zanganeh told reporters. He insisted Tehran deserved a quota – based on historic output levels – of 14.5 percent of OPEC’s overall production.

Understandably, OPEC failed to agree a clear oil-output strategy as Iran insisted on steeply raising its own production, though Tehran’s arch-rival Saudi Arabia promised not to flood the market and sought to mend fences within the organization.

Since OPEC failed to agree any policy, it would again convince the market that its main members could try to raise supplies further to gain market share despite low prices. UAE Oil Minister Suhail bin Mohammed al-Mazroui said oil markets were still not close to rebalancing due to a severe glut and a further price correction was possible. The Venezuelan energy minister Eulogio Del Pino also warned that supply outages have propped up prices in recent months but a global oil glut might build up again when missing barrels return. “More than 3 million barrels are out of the market. When those circumstances are removed from the market, what’s going to happen?” he asked reporters in Vienna.

Despite the setback, Saudi Arabia moved to soothe market fears that failure to reach any deal would prompt OPEC’s largest producer, already pumping near record highs, to raise production further to punish rivals and gain additional market share. “We will be very gentle in our approach and make sure we don’t shock the market in any way,” Falih told reporters. “There is no reason to expect that Saudi Arabia is going to go on a flooding campaign,” Falih said when asked whether Saudi Arabia could accelerate production.

That OPEC could not agree on a benign deal is a sign that political differences are undermining the organization, said Gary Ross, founder of US-based PIRA consultancy. “It is bearish short-term for oil prices. But what is also important is that Saudis are not planning to flood the market,” Ross added.

Zanganeh made a few conciliatory remarks, saying he was happy with the meeting and received no signals from other producers that they planned to increase output. Sources say, after the Doha debacle, it actually restores market confidence that Saudi Arabia is committed to OPEC. This is a success compared to three days ago when people had been expecting Falih to walk out of the OPEC room.

The flow of drilling mud is seen in a container while an oilfield worker works on a drilling rig at an oil well operated by Venezuela’s state oil company PDVSA, in the oil rich Orinoco belt, near Cabrutica at the state of Anzoategui April 16, 2015.

At its previous meeting in December 2015, OPEC effectively allowed its 13 members to pump at will. As a result, prices crashed to $27 per barrel in January, their lowest in over a decade, but have since recovered to around $50 due to global supply outages. Last week, Brent prices were down 1.5 percent at $49 per barrel after the OPEC meeting but later rallied on data showing a weekly drawdown in U.S. crude stockpiles.

Traditional rivals, Saudi Arabia and Iran, continue to fight to prove their supremacy in OPEC. Neither gives up an opportunity to hurt the other, whenever and wherever they can, and oil seems to be their favorite playground. With Saudi Arabia scuttling any chances of a production freeze in Doha in April, Iran has followed suit by thwarting attempts by Saudi Arabia to introduce a production ceiling on OPEC production in last week’s meeting held in Vienna.

Iran, which is close to its pre-sanction levels of production, had earlier agreed to discuss being part of any production freeze after it reached its desired output. However, Iran refused to adhere to any production ceiling, which led to OPEC abandoning the idea.

Iran has been a dark horse since the lifting of sanctions, increasing its market share quickly to the surprise of many investors. Iran has resorted to offering large discounts to its Asian customers, undercutting the Saudi and Iraqi prices to levels not seen since 2007-2008 in order to regain their market share. Iran shipped 2.3 million barrels per day in April 2016, the highest level since 2012. These figures are 15 percent higher than the International Energy Agency (IEA) forecast. Iran has been successful in its strategy until now, but increasing its market share further might prove difficult.

Meanwhile, Saudi Arabia is attempting to cement its market share in the wake of this increased production from Iran and Iraq. Though Saudi Arabia is attempting to transition away from being an oil-dependent economy, its transformation depends on the successful listing of Saudi Aramco. As part of its preparation for the listing, Aramco is gaining market share and improving its efficiency, according to its chief executive, Amin Nasser. “We are preserving our market share, which continues to increase year-on-year,” he said in the interview. “This year, as last year, it is increasing. Our market share is picking up,” he added, without giving figures, reports Reuters.

Ian Bremmer, the president of political risk consultancy Eurasia Group, said that the Saudi’s looked set to increase production after speaking with executives and a member of the Saudi ruling family.

Iran is better equipped to cope with the long-term upheaval because it is less dependent on oil than Saudi Arabia, having raised more through general taxation than through oil duties last year.

The struggle for supremacy between the two West Asian nations doesn’t show any signs of abating, and there is no clear winner in this showdown. Though Saudi Arabia has large reserves, it is burning them at a fast rate. On the other hand, experts believe that the Iranian economy is better equipped to withstand lower oil prices because its economy is more diversified and has an educated and hardworking population. The fight between the two for supremacy in the Middle East region is unlikely to end anytime soon. Currently, supply outages to the tune of 3.5 million b/d are supporting the oil prices by creating a balance between demand and supply.

Once Nigeria, Libya, and Canada resume pumping at their normal levels, the effects of the struggle between Iran and Saudi Arabia will be felt. If both increase production, the world will be awash with oil, pulling prices back to the mid $30/barrel levels.

But then the new oil exporters could also play oil politics along with OPEC.

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First Aid: How Russia and the West Can Help Syrians in Idlib

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Authors: Andrey Kortunov and Julien Barnes-Dacey*

The next international showdown on Syria is quickly coming into view. After ten years of conflict, Bashar al-Assad may have won the war, but much is left to be done to win the peace. This is nowhere more so than in the province of Idlib, which is home to nearly 3 million people who now live under the control of extremist group Hayat Tahrir al-Sham (HTS) with external Turkish protection and humanitarian assistance from the United Nations.

The question of humanitarian access into Idlib is now emerging as a central focus of new international politicking. In so doing, this small province could be pivotal to the future of the larger stalemate that has left the United States, Europe, and Russia locked in an unwinnable status quo.

Russia has said that it plans to veto an extension of cross-border UN aid delivered from Turkey, authorised under UN Security Council resolution 2533, which is up for renewal in July, potentially depriving the population of a vital lifeline amid desperate conditions. Moscow says that all aid should be channelled from Damascus via three new government-controlled crossing points to the northern province. Western governments, to say nothing of the local population, are sceptical, given the Syrian government’s hostility towards the province’s inhabitants. For its part, the UN says that cross-lines aid cannot compensate for a closure of cross-border access.

As ever, the two dominant players—the US and Russia—are talking past each other and are focused on countering each other’s moves—to their mutual failure. It is evident that US condemnation and pressure on Russia will not deliver the necessary aid, and also evident that Russia will not get its wish for the international recognition of the legitimacy of the Syrian government by vetoing cross-border access. While these will only be diplomatic failures for the US and Russia, it is the Syrian people who will, as ever, pay the highest price.

But a mutually beneficial solution to Idlib is still possible. Russia and the US, backed by European states, should agree to a new formula whereby Moscow greenlights a final one-year extension of cross-border aid in exchange for a Western agreement to increase aid flows via Damascus, including through Russia’s proposed cross-lines channels into Idlib. This would meet the interests of both sides, allowing immediate humanitarian needs to be met on the ground as desired by the West, while also paving the way for a transition towards the Damascus-centred international aid operation sought by Moscow.

This imperfect but practical compromise would mean more than a positive change in the humanitarian situation in Idlib. It would demonstrate the ability of Russian and Western actors to work together to reach specific agreements in Syria even if their respective approaches to the wider conflict differ significantly. This could serve to reactivate the UN Security Council mechanism, which has been paralysed and absent from the Syrian track for too long.

To be sure the Syrian government will also need to be incentivised to comply. Western governments will need to be willing to increase humanitarian and early recovery support to other parts of government-controlled Syria even as they channel aid to Idlib. With the country now experiencing a dramatic economic implosion, this could serve as a welcome reprieve to Damascus. It would also meet Western interests in not seeing a full state collapse and worsening humanitarian tragedy.

The underlying condition for this increased aid will need to be transparency and access to ensure that assistance is actually delivered to those in need. The West and Russia will need to work on implementing a viable monitoring mechanism for aid flows channelled via Damascus. This will give Moscow an opportunity to push the Syrian regime harder on matters of corruption and mismanagement.

For its part, the West will need to work with Moscow to exercise pressure on Ankara to use its military presence in Idlib to more comprehensively confront radical Islamists and ensure that aid flows do not empower HTS. A ‘deradicalisation’ of Idlib will need to take the form of a detailed roadmap, including that HTS comply with specific behaviour related to humanitarian deliveries.

Ultimately this proposal will not be wholly satisfactory to either Moscow or the West. The West will not like that it is only a one-year extension and will not like the shift towards Damascus. Russia will not like that it is an extension at all. But for all sides the benefits should outweigh the downsides.

Russia will know that Western actors will respond to failure by unilaterally channelling non-UN legitimised aid into the country via Turkey. Russia will lose the opportunity to slowly move Idlib back into Damascus’s orbit and the country’s de facto partition will be entrenched. This outcome is also likely to lead to increased instability as aid flows decrease, with subsequent tensions between Moscow’s allies, Damascus and Ankara.

The West will need to acknowledge that this approach offers the best way of delivering ongoing aid into Idlib and securing greater transparency on wider support across Syria. The alternative—bilateral cross-border support—will not sufficiently meet needs on the ground, will place even greater responsibility on Turkey, and will increase the prospect of Western confrontation with Russia and the Syrian regime.

Importantly, this proposal could also create space for wider political talks on Idlib’s fate. It could lead to a renewed track between Russia, the US, Turkey and Europeans to address the province’s fate in a way that accounts for Syria’s territorial integrity and state sovereignty on the one hand and the needs and security of the local population on the other hand. After ten years of devastating conflict, a humanitarian compromise in Idlib will not represent a huge victory. But a limited agreement could still go a long way to positively changing the momentum in Syria and opening up a pathway for much-needed international cooperation.

* Julien Barnes-Dacey, Middle East and North Africa Programme Director, European Council on Foreign Relations (ECFR)

From our partner RIAC

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Iran’s Impunity Will Grow if Evidence of Past Crimes is Fully Destroyed

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No reasonable person would deny the importance of preventing a nuclear-armed Iran. But that issue must not be allowed to continue overshadowing Iran’s responsibility for terrorism and systematic human rights violations. These matters represent a much more imminent threat to human life, as well as longstanding denials of justice for those who have suffered from the Iranian regime’s actions in the past.

The Iranian people have risen multiple times in recent years to call for democratic change. In 2017, major uprisings broke out against the regime’s disastrous policies. Although the ruling clerics suppressed those protests, public unrest soon resumed in November 2019. That uprising was even broader in scope and intensity. The regime responded by opening fire on crowds, murdering at least 1,500. Amnesty International has reported on the torture that is still being meted out to participants in the uprising.

Meanwhile, the United Nations and human rights organizations have continued to repeat longstanding calls for increased attention to some of the worst crimes perpetrated by the regime in previous years.

Last year, Amnesty International praised a “momentous breakthrough” when seven UN human rights experts demanded an end to the ongoing cover-up of a massacre of political prisoners in the summer of 1988.

The killings were ordered by the regime’s previous supreme leader Khomeini, who declared that opponents of the theocracy were “enemies of God” and thus subject to summary executions. In response, prisons throughout Iran convened “death commissions” that were tasked with interrogating political prisoners over their views. Those who rejected the regime’s fundamentalist interpretation of Islam were hanged, often in groups, and their bodies were dumped mostly in mass graves, the locations of which were held secret.

In the end, at least 30,000 political prisoners were massacred. The regime has been trying hard to erase the record of its crimes, including the mass graves. Its cover-up has unfortunately been enabled to some degree by the persistent lack of a coordinated international response to the situation – a failure that was acknowledged in the UN experts’ letter.

The letter noted that although the systematic executions had been referenced in a 1988 UN resolution on Iran’s human rights record, none of the relevant entities within that international body followed up on the case, and the massacre went unpunished and underreported.

For nearly three decades, the regime enforced silence regarding any public discussion of the killings, before this was challenged in 2016 by the leak of an audio recording that featured contemporary officials discussing the 1988 massacre. Regime officials, like then-Minister of Justice Mostafa Pourmohammadi, told state media that they were proud of committing the killings.

Today, the main victims of that massacre, the principal opposition Mujahedin-e Khalq (MEK), are still targets of terrorist plots on Western soil, instigated by the Iranian regime. The most significant of these in recent years was the plot to bomb a gathering organized near Paris in 2018 by the MEK’s parent coalition, the National Council of Resistance of Iran (NCRI). The Free Iran rally was attended by tens of thousands of Iranian expatriates from throughout the world, as well as hundreds of political dignitaries, and if the attack had not been prevented by law enforcement, it would have no doubt been among the worst terrorist attacks in recent European history.

The mastermind of that attack was a high-ranking Iranian diplomat named Assadollah Assadi. He was convicted in a Belgian court alongside three co-conspirators in February. But serious critics of the Iranian regime have insisted that accountability must not stop here.

If Tehran believes it has gotten away with the 1988 massacre, one of the worst crimes against humanity from the late 20th century, it can also get away with threatening the West and killing protesters by the hundreds. The ongoing destruction of mass graves demonstrates the regime’s understanding that it has not truly gotten away with the massacre as long as evidence remains to be exposed.

The evidence of mass graves has been tentatively identified in at least 36 different cities, but a number of those sites have since been covered by pavement and large structures. There are also signs that this development has accelerated in recent years as awareness of the massacre has gradually expanded. Unfortunately, the destruction currently threatens to outpace the campaign for accountability, and it is up to the United Nations and its leading member states to accelerate that campaign and halt the regime’s destruction of evidence.

If this does not happen and the 1988 massacre is consigned to history before anyone has been brought to justice, it will be difficult to compel Tehran into taking its critics seriously about anything, be it more recent human rights violations, ongoing terrorist threats, or even the nuclear program that authorities have been advancing in spite of the Western conciliation that underlay 2015 Joint Comprehensive Plan of Action.

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What Does China-Iran Relations mean for United States?

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china iran

What China wants in the Middle East

Although the recent China-Iran deal prompted extensive debates in international media, Iran is not the only country in the region to keep up a strategic partnership with China. The GCC states such as Saudi Arabia (since 2016) and the United Arab Emirates (since 2018) do as well. According to the China Global Investment Tracker, Beijing invested up to $62.55 billion in Saudi Arabia and the UAE between 2008 and 2019. (Julia Gurol & Jacopo Scita, 2020) Although due to the impacts of Washington’s maximum pressure strategy this new dimension of relationships looks more beneficial to Iran than to China, however, Beijing will now merge as one of the global powers to make sure the survival of the JCPOA presenting China with the opportunity to set the tone in the broader nuclear non-proliferation debates.

Economically, China needs to import its energy mostly from the Middle East and it also maintains a huge interest in exporting. China, in Iran’s Pivot to the East policy, will become now one of few formal buyers of Iran’s oil boosting its footprint in the Iranian market. Under the umbrella of the One Belt, One Road project, China is steadily expanding its political influence and investment plans in the Strait of Hormuz, the Persian Gulf, which has occurred as a new theatre of U.S.-Iran power competition. Moreover, China is keen to stabilise the security environment that will help its infrastructure investments in the region. (Global Times, 2017) According to China’s estimations, the growth opportunities through the One Belt, One Road project will reduce tensions in the Middle East. (Xinhua, 2017) Therefore, China has proceeded to invest in Iran. The latest example was a 538 million USD railway deal. (South China Morning Post, 2017)

Iran’s Look East Policy

Iran’s policy of a “Pivot to the East” involves developing robust ties with the giants of the Asian continent, namely, China and Russia. (Micha’elTanchum, 2020) China and Iran have now signed an agreement, a roadmap for 25 years. While the Iranian government spokesperson said that there was no legal obligation to publish it (Patrick Wintour, 2021), we can assume that the agreement entails political-strategic, economic and cultural components for improving and promoting relations between China and Iran in the long run. The present agreement emphasises the effective participation of Iran in the Chinese one belt one road project with extensive projects in infrastructure, financial and banking fields. In terms of the political-strategic dimension (military, defence and security), China and Iran will set up close positions and cooperation promoting exchanges, and consultations on issues of mutual interest, including strengthening the defence infrastructure, countering terrorism and holding regular military manoeuvres. (Hossein Amir Abdollahian, 2021) China and Iran have emphasised economic ties, including cooperation in the fields of oil, industry and mining, and energy-related fields. 

China was essential to striking a nuclear deal between Iran and the West. First, the Chinese were a real (if occasionally reluctant) partner in building pressure on Tehran. Beijing voted for six UN Security Council resolutions targeting Iran between 2006 and 2010 (The Arms Control Association, 2017), and China’s oil imports from Iran fell by more than 20 per cent in 2012-2013 when the United States was rising its crippling sanctions campaign. (Middle East Institute, 2016) As Iran’s most considerable oil customer, Chinese cooperation was crucial to the effort. China was then important to designing the JCPOA.

For almost three years, the destiny of the 2015 Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA) hung in the balance (Guardian News, 2018). However, the Trump administration withdrew from the JCPOA in 2018, an international agreement between Iran and world powers endorsed by the UN Security Council in Resolution 2231 seeking a “maximum pressure” strategy. (Hossein Mousavian, 2019) The maximum pressure strategy by the United States, if anything, sharpened Tehran’s wish to introduce Beijing as a reliable economic and political ally under the atmosphere of threats and sanctions. Thus, Iran’s policy of a Pivot to the East has achieved all the more credibility among Iranian officials after the United States withdrew from the JCPOA.

Thus, the relationship between the two countries is asymmetrical but highly pragmatic. Economic sanctions against Iran have driven the growth of China-Iran economic ties. Having been cut off from the West by sanctions, Iran has engaged in a Look East Policy. China is now Iran’s largest trade partner, its largest oil purchaser, and its largest foreign investor.

The US-Iran relations and Implications for China

A point of agreement between the United States and China is that both do not want a war in the region. China and Iran share the interests that they substantially oppose violent regime change policies. The existing U.S. sanctions and other bold moves will raise uncertainties to business and presumably postpone much of the economic engagements of China in Iran. But these policies may lead China and Iran to reduce imports and exports from each other and seek alternatives, but the policies imposed by Washington will not stop Sino-Iranian exchanges completely. Iran is not part of China’s immediate neighbourhood, but China is becoming an important part of the Iranian security calculations. 

The Trump Administration’s chaotic foreign policy offered a buffet of opportunities to Beijing. Given the absence of ties between Tehran and Washington, China steps in opportunistically. The United States’ maximum pressure campaign on Iran, combined with a confrontational approach from Saudi Arabia and Israel vis-à-vis Iran and the growth of tensions in the Strait of Hormuz are endangering both the freedom of navigation, energy security and flow of oil supplies through the Persian Gulf. Nevertheless, China seems quite reluctant to become bogged down in the regional tensions and attempts to avoid a military conflict. China’s reluctance to act as a security guarantor in the Persian Gulf indicates that Beijing does not want to pay any of the costs of possible military tensions in the Middle East and that its security strategy towards the Persian Gulf is not yet well-known. (Job B Alterman, 2013) Hence, Beijing seems unlikely to proclaim any peace initiatives for Iran and Persian Gulf security beyond broad calls for peace in the region, probably maintaining China’s existing policy of non-interference. (Camille Lons, Jonathan Fulton, Degang Sun, & Naser Al-Tamimi, 2019)

Although China would need to support cooperation with Iran on civil nuclear projects, China has been careful as Iran’s main partner in reconstructing nuclear facilities, not desiring to get ahead of the United States. Diplomatically, Beijing and Tehran stay together as long as Washington continues unilateral measures against them, although it’s unlikely that Tehran or Beijing use the alliance to confront Washington directly. Currently, with the Biden Administrations delay in recovering relations both with Iran and the failure to offer to substantially resolve the trade war with China, Beijing would be reluctant to help the United States to regain its footprint in the Middle East and certainly not dominance over the only country in the region with rich hydrocarbon resources in which Americans lack a foothold. 

Iran-China relations is also linked to the fate of their respective relations with Washington and Iran’s upcoming election in 2021. Although China and Iran now share many strategic interests, in the long run, Iran’s wish to build up good relations with Western powers may affect its relationship with China. It remains yet unclear how far United States commercial and banking sectors will be willing to ease sanctions and engage with Iran. The United States can revisit Iran policy to avoid a major crisis with Iran and pave the way for a new round of negotiations with Iran. Otherwise, under the current conditions, we can expect Chinese players to create and widen influence and ties to keep up ties with Tehran without overly provoking Washington. 

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