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(Bloomberg) — President Donald Trump said China can continue to purchase oil from Iran, abruptly easing the “maximum pressure” the US had been applying to the Middle Eastern country’s economic lifeblood.
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The shift comes mere hours after Trump declared that Iran and Israel had agreed on a ceasefire, which got off to a shaky start with early breaches of the deal by both sides. It follows massive US airstrikes on several of the Islamic Republic’s nuclear facilities on Sunday, an offensive aimed at stopping Tehran from obtaining an atomic weapon.
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Oil prices extended losses after Trump’s comments, with West Texas Intermediate futures sinking about 5% to almost $65 a barrel as of 10 a.m. in New York. The market had already plunged as the threat to oil flows from the Israel-Iran conflict faded.
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“China can now continue to purchase oil from Iran,” the president said in a post on Truth Social on Tuesday.
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It’s a major reversal for a president who as recently as last month was insisting that all purchases of Iranian oil or petrochemical products “must stop, NOW!”. Buyers would be subject to secondary sanctions and prevented from engaging in any business with the US, he said.
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That threat built on previous warnings from his administration. In February, Treasury Secretary Scott Bessent said that Washington intended to squeeze Iran’s oil exports to less than 10% of current levels, as it renewed the campaign of “maximum pressure” deployed during Trump’s first term.
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The sanctions were intended to force Iran to voluntarily give up uranium enrichment so that it would never be in a position to obtain a nuclear weapon. While the US airstrikes over the weekend appear to have seriously damaged the country’s nuclear facilities, the International Atomic Energy Agency still does not know what happened to Tehran’s stockpiked of 409 kilograms (902 pounds) of highly-enriched uranium — potentially enough for 10 nuclear warheads.
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The US has sanctioned hundreds of oil tankers for their role in handling Tehran’s petroleum and, absent an easing in those measures, some buyers may still take a more-cautious approach.
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The White House has also targeted Chinese entities that bought Iranian oil, something that could make other buyers wary. Likewise, secondary sanctions on Iran’s sales remain in place at this time and its not clear where the president’s remarks will leave those.
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—With assistance from Alaric Nightingale, Julian Lee, Jordan Fabian and Alexander Pearson.
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English (US)