Iran unilaterally tore up the contract and demanded a higher price and did not deliver Chinese crude

Mondo International Updated on 2024-02-01

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Recently, a news item in the Saudi Middle East newspaper has attracted widespread attention, revealing that the ** deal between China and Iran has once again become controversial. According to reports, Iran unilaterally considers the ** provided by China "unreasonable", requires the Chinese side to increase the settlement ** on the basis of the original contract, and has stopped deliveries to the Chinese side**.

Iran's use of this discount to provide oil is mainly because they believe that the original agreement was too low. However, this agreement was reached by both sides a long time ago, and Iran should not unilaterally tear up the contract and sit on the ground. They may mistakenly believe that China cannot do without the cheap ** they offer, and think that they have mistreated China, but the impact of the Sino-Iranian ** deal is far more than that.

In fact, Iran's unilateral tearing up of the contract does not have a great impact on China. China's imports from Iran account for only 10% of total imports, while China has a wide range of oil substitution channels. Therefore, although Iran's cessation of *** has had a certain impact on China, it will not pose a major threat to China.

However, for the Iranian state, such an approach is very dangerous. Iran sees oil as the lifeblood of its economy, so tearing up the contract will have a huge impact on the Iranian economy. In December, oil deals between China and Iran were about 13% lower than in October, according to OPEC data. This means that Iran's oil production could collapse as a result of a default. Iran's move may be because they believe that better benefits can be gained by raising the country.

China is the world's largest importer, while Iran is one of China's largest. Due to US sanctions against Iran, many countries are afraid to import Iranian oil. However, China has always adhered to its own economic and trade principles and is not subject to the will of other countries.

Although China is under pressure from US sanctions, it still engages with Iran according to its own needs. This has not only strengthened the economic and trade relations between the two countries, but also demonstrated to the world China's principle of independence and self-determination in international economic and trade relations.

Although the economic and trade relationship between China and Iran faces some challenges, such as the impact of US sanctions and legal issues such as contract enforcement, the economic and trade cooperation between China and Iran is based on the principle of win-win, and both countries benefit from it.

However, Iran may have grossly misjudged the reality of the situation. While geopolitical conflicts such as the Middle East and Russia-Ukraine have led to increased uncertainty in the global oil market, these conflicts will not change the supply and demand relationship in the global oil market in the long run.

Iran may see this as an opportunity to boost its oil exports, especially in the face of U.S. sanctions, as it hopes to make up for its economic losses by increasing its oil exports to China and to boost its position and influence on the international stage.

However, Iran may be underestimating China's alternative energy sources and import channels. China is already seeking to diversify*** and has made significant progress in the field of petroleum alternative energy. In addition, China has good relations with other oil producers, such as Saudi Arabia and Russia, which can help China fill the void of the shutdown from Iran.

In the face of Iran's discount demand and the cessation of *** behavior, China can take the following measures:

1.Dialogue and Consultation: Engage in dialogue and consultation with Iran to resolve disputes and find a mutually acceptable solution.

2.Diversify energy sources and partners: Further diversify China's energy sources and partners, reduce dependence on Iran, and reduce potential risks.

3.Strengthen the enforcement of legal contracts: Adopt appropriate laws and contract provisions to ensure the smooth conduct of oil transactions between China and Iran and safeguard the legitimate rights and interests of both parties.

In short, Iran's unilateral tearing up of the contract and demanding a higher level of non-delivery to China will have limited impact on China, but it may pose a huge challenge to Iran's own economic and geopolitical position. The two sides should seek solutions through dialogue and consultation, while China should strengthen the diversification of energy and partners to reduce potential risks.

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