Quick overview

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The White House clarified President Donald Trump’s statement on Tuesday that China can continually buy Iranian oil after Israel and Iran reached a ceasefire agreement did not signify a lifting of US sanctions. China is now able to keep buying oil from Iran.

The president pointed out that Iran hasn’t tried to block oil tankers from passing through the Strait of Hormuz yet because China, the world’s largest importer of Iranian oil.

The official stated that the president is still urging China and all other nations to purchase our advanced oil instead of Iranian oil, which is prohibited by US sanctions.

Trump’s remarks regarding China were another negative indication for oil prices following the ceasefire announcement, which caused them to drop by almost 6% on Tuesday.

Trump declared in February that he was re-imposing maximum pressure on Iran over its nuclear program and financing of militants throughout the Middle East, to drive its oil exports to zero. Any easing of sanctions enforcement on Iran would represent a change in US policy.

In addition to not implementing sanctions, Trump has the authority to suspend or waive sanctions imposed by executive order or under the powers granted to presidents by laws passed by Congress. Trump imposed waves of Iran-related sanctions on China’s independent “teapot” refineries and port terminal operators for purchases of Iranian oil.

 Tehran has demanded that any agreement include permanent lifting. Licenses and waivers would need to be issued by the US Treasury and the State Department, respectively, and both need to be notified by Congress.