Iran’s threats against Israel and Venezuela’s threats against Guyana are in vain. China is behind this, says oil expert Paul Sankey. Getty Images
China’s stance in oil markets could reduce aggression between producers, Paul Sankey said.
A big part of it is China standing behind the curtain and saying: Can you please not cut off our oil supply?
Meanwhile, the US is voting on sanctions against Iran and China.
China’s strong exposure to crude oil markets could be a calming factor amid geopolitical tensions, oil expert Paul Sankey said in a statement Interview mit CNBC.
“It is interesting that Venezuelan threats against Guyana have come to nothing. The Iranian threats are also in vain,” said the founder of Sankey Research. “And I think a big part of it is China standing behind the curtain and saying: Can you please not cut off our oil supply? We don’t need this, we have our own problems.”
After all, the country is the world‘s largest buyer of crude oil and an important customer for producers sanctioned by the West. These include Russia and Iran, with which China has one alternative oil market as the think tank The Atlantic Council noted in March.
Sankey explains the oil market’s cautious reaction to the tensions between Iran and Israel that flared up over the weekend with the fact that China is buying crude oil from Tehran on a large scale: the international reference Brent even fell below 90 dollars (85 euros) per barrel on Monday.
Read too
Russia and Middle East crisis: A worsening “would restrict Iran from continuing to be an arms supplier to Russia”
“I think the main reason for all this is Iranian oil supplies to China. I believe the oil flowing east is the key,” he said. According to Reuters, small Chinese refineries are taking 90 percent of Iran’s total oil exports ab.
Citing a JPMorgan analysis over the weekend, Sankey agreed that no country had an interest in deepening hostilities and he expected some form of sanctions to be imposed on Tehran instead.
This appears to be already underway, as the US House of Representatives voted on Monday to expand secondary sanctions against Iran, as “Bloomberg“ reported. The law would also affect Iran’s crude oil trade with China.
Meanwhile seem Tensions between Venezuela and Guyana continue, even if there have been few major developments in recent months. The conflict between the two oil producers erupted in late 2023 when Caracas announced it would annex an oil-rich region that is part of Guyana.
Read the original article in English here.