China’s largest independent oil refining company says it has stopped buying crude from the United States and has already turned to Iranian imports amid growing trade tensions between Beijing and Washington.
ShanDong Dongming Petrochemical Group announced the news on its official website on Monday, but giving no further details regarding the shift in its purchase policy.
The large-scale diversified equity petrochemical enterprise group has nearly 6,300 employees and total assets of 30 billion yuan ($4.5 billion), with the primary processing capacity of 15 million tons per year.
The development come as Beijing is reportedly planning to introduce duties on American crude imports and to replace them with oil from West Africa and the Middle East, including Iran.
Last month, US President Donald Trump announced 25-percent tariffs on $50 billion in annual Chinese imports. He said he had also directed the US Trade Representative to identify $200 billion worth of imports for additional tariffs.
The American leader also stressed at the time that his administration would be identifying another $200 billion in tariffs if China retaliated the new measures. The total of $450 billion in goods represents the lion’s share of all of China’s exports to the US.
The US administration had originally proposed duties in April, starting with 1,333 Chinese products. After obtaining some public feedback, it omitted 515 imports from the blacklist but added 284 others.
Washington will impose duties on 818 Chinese products, worth $34 billion a year, from the original list, due to take effect on July 6. The Trump administration will not target the 284 other items — worth $16 billion — until it collects further public comments.
China, for its part, has vowed to retaliate with matching duties on US goods.
The Chinese tariffs include duties on vehicles and many agricultural and food products, such as soybeans, which will hit American farmers — normally part of Trump’s popular base — hard. The remaining $15-billion Chinese tariffs would be imposed in the second phase and would target US crude oil, propane, and chemicals.
The Chinese authorities have already said that Beijing also would not fall into line with US sanctions banning business with Iran.
Back in May, Trump said he was withdrawing from a hard-fought deal signed between Iran and world powers in 2015 under which Tehran agreed to limit its nuclear capacities in exchange for relief from crippling economic sanctions. Trump’s controversial decision paved the way for new sanctions on Iran and punitive measures for those who trade with it.
Furthermore, the US administration is strongly demanding all countries halt imports of Iranian oil by November 4 as part of its new policy of hostility towards the Islamic Republic following Washington’s unilateral withdrawal from the 2015 nuclear accord.
China is America’s second-biggest crude buyer with exports reportedly totaling 400,000 barrels a day at the beginning of this month.