Iran's oil exports to China could face heavier US sanctions if nuclear talks collapse

Iran's crude oil exports to China could be subject to increased US sanctions, in a bid to pressure Tehran to curb its nuclear programme, according to reports.

Washington has been participating indirectly in talks held in Vienna between Iran and the other remaining parties in the Joint Comprehensive Plan of Action (JCPOA) or Iran nuclear deal, including China and the UK.

At these discussions, which began in April, Iran seeks sanctions relief in return for rescuing the agreement, which then-US President Donald Trump withdrew from in 2018.

With progress having slowed, Washington is weighing up how to incentivise Iran to continue with the process and penalise Tehran it withdraws, The Wall Street Journal reported on Monday.

The strategies available include sanctions aimed at Tehran's critical oil exports to China, its most important buyer.

The restrictions would hit the maritime routes responsible for moving around a million barrels daily, according to the WSJ's American sources, who explained that such a move would occur should the JCPOA discussions fall flat.

Washington would also strengthen its restrictions on Iran's crude and shipping sectors.

A figure on the US side told the WSJ: "There is not much left to sanction in Iran's economy.

"Iran's oil sales to China is the prize."

But US insiders warned that such a move could have unintended consequences and push Tehran into speeding up its nuclear development.

They also noted that the China oil plan is not the only move being deliberated, with political efforts underway to encourage big crude-purchasing nations - including China and India - to reduce their intakes of  Iranian oil and to slash finance activities with Tehran.

Discussions in Vienna are at a standstill following the election of ultraconservative Ebrahim Raisi to the Iranian presidency, who insists the Islamic Republic will only reach an agreement if US sanctions are lifted.

The US is clear this will not happen.

Meanwhile, Abbas Araghchi, Tehran's second-in-command at the foreign ministry who oversees nuclear discussions, said on Twitter this weekend that the Vienna process can only proceed after Raisi takes power in August.

"There is I think scope for tensions, in that the Biden administration appears committed to essentially a return to the JCPOA, while Israel is opposed" https://t.co/KKNj33HdwU

— The New Arab (@The_NewArab) June 21, 2021

US State Department spokesperson Ned Price said that Washington will not wait forever to rescue the JCPOA.

One of the WSJ insiders said there would then be "things that are relatively easy to do… and things that would take more time".

This comes as US and European officials claimed Iran would in two to three months be able to gather the materials needed to construct a nuclear weapon.

The New Arab has reached out to the New York-based Iranian mission to the UN.