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Iran seeks closer ties with China as nuclear talks drag on

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Iran seeks closer ties with China as nuclear talks drag on

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As talks between Iran, the United States and other world powers to revive the 2015 nuclear deal continue, the Islamic Republic attempts to strengthen ties with China, Russia and other countries that could help it bypass US sanctions hitting its economy.

Iranian Foreign Minister Hossein Amir-Abdollahian met his Chinese counterpart on Friday to discuss a broad economic and security cooperation agreement signed between the two countries in Tehran early last year, among others, according to his ministry. Implementing the 25-year deal to boost trade and nuclear talks in Vienna, of which China is a part, are high on the agenda, an Iranian official said.

China has become a vital economic lifeline for Iran after the Trump administration withdrew the United States from the multilateral nuclear deal in 2018 and reimposed sanctions on Tehran.

Last year, China imported at least 590,000 barrels of oil a day on average from Iran, the highest level since sanctions were reinstated, according to Paris-based commodities data provider Kpler. Beijing does not disclose how much oil it imports from Tehran.

While Iran says it is not trying to build nuclear weapons, a review of its key facilities suggests it could develop the technology to make them. The WSJ shatters Tehran’s capabilities as it takes new steps in uranium enrichment and limits access to inspectors. Photographic illustration: George Downs

Also this week, Iranian Foreign Ministry spokesman Saeed Khatibzadeh said President Ebrahim Raisi will visit Russia soon. The two countries are expected to sign a 20-year cooperation agreement to strengthen trade and military ties during the visit, he added.

The visits aim to put pressure on allies such as China and Russia to help bring the nuclear talks to a conclusion, according to the Iranian official. “To remind these countries of the vast and more important trade opportunities that would open up for them if the deal was revived,” he said. However, what remains unclear is how much China and Russia are willing to risk for Iran as long as US sanctions remain in place.

The two countries are participating in talks in Vienna to save the nuclear deal. And while the two are courted by Iran, they are also urged by Washington to step up the pressure on Iran to compromise and come to an agreement to reinstate the 2015 agreement soon. Westerners say that because of Iran’s nuclear work, time is running out to save the deal.

U.S. officials have started to step up sanctions enforcement and have said that in the future this may mean targeting other Chinese businesses and individuals with sanctions. Russia and China do not want Iran to develop a nuclear weapon, and China in particular is vulnerable to conflict and new instability in the Middle East, its main energy supplier.

Wang spoke by video conference at a multilateral conference on Afghanistan in Tehran on October 27.


Photo:

attack kenare / Agence France-Presse / Getty Images

Iran has high hopes for China, according to Diako Hosseini, a political analyst and former director of the Center for Strategic Studies, an Iranian think tank affiliated with the presidential office. “But if Iran remains under heavy US sanctions, Chinese companies would not be willing to work with Iran because it could affect them in other parts of the world,” he said.

Negotiations to salvage the 2015 deal, which lifted most international sanctions on Tehran in exchange for strict but temporary restrictions on its nuclear program, resumed in late December after stalling in 2021 despite months of talks.

Iran’s new negotiating team, which has joined the talks since Raisi took office in August, has tightened its conditions for a return to the deal, according to Western diplomats. Diplomats say that with the advance of Iran’s nuclear program, negotiations are only now reverting to key issues that were on the table under the previous government.

Meanwhile, Iran is also seeking deals with several countries in Asia and elsewhere to trade its oil and gas for goods it needs, which Iranian officials say would allow it to bypass US sanctions.

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Last month, Iran signed an agreement with Sri Lanka under which the South Asian country would pay its oil import duties to Iran through exports of tea and other items. In November, Iran signed a similar deal with Pakistan to swap its gas for rice. Iranian officials said they are also negotiating with Turkish companies to build homes in the Persian Gulf country in exchange for oil and gas.

Unlike his predecessor, Hassan Rouhani, whose government aimed to boost Western investment in Iran, Raisi said he wanted to forge ties outside the West and envisioned countries like China and Russia as longer-term partners to sell its oil and buy weapons. The move has been encouraged for years by Iranian Supreme Leader Ali Khamenei, who has the final say on the country’s foreign policy, including the nuclear deal.

“Sir. Raisi’s administration is particularly focused on the east,” Major General Mohammad Bagheri, Iranian armed forces chief of staff, said during a recent visit to Moscow.

But these links have cost Iran dearly. The terms of deals between Iran and China often tend to be more favorable for the latter, say businessmen in Tehran, many of whom complain that they have little choice when Beijing often sells them products from China. bad quality. Many of Tehran’s barter deals also end up collapsing under threat of sanctions.

“Unfortunately, money is still king, and if you can’t show it, you can’t expect real bargaining power,” said Mostafa Pakzad, director of Tehran-based Pakzad & Co., who advises foreign companies doing business with Iran.

Still, it looks like Iran’s recent efforts are at least bringing in vital foreign currency – for now. The value of goods passing through its borders, mainly from Asian countries, reached $ 33 billion, an increase of 45%, in the eight months to November 2021, according to the latest figures released by the Iranian customs service.

A State Department spokesperson, while declining to comment on the barter deals with Iran, said the United States was applying its sanctions to Iran. “We will of course deal with any effort to evade sanctions,” the spokesperson said.

Meanwhile, amid rising global oil prices, China is ramping up shipments of cheap Iranian crude. On Thursday, Raisi said oil exports from Iran, of which Beijing is the main beneficiary, had increased by 40% since taking office in August, a figure in line with independent estimates. In turn, Beijing’s sales to Tehran, which include essential goods such as auto parts and medicines, jumped to nearly $ 1 billion in November 2021, their highest level since April 2019, according to the reports. Chinese customs data.

Write to Benoit Faucon at benoit.faucon@wsj.com

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Iran seeks closer ties with China as nuclear talks drag on

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