JAKARTA - United States (US) President Donald Trump said China could continue to buy Iranian oil after Israel and Iran agreed to a ceasefire.
China can now continue to buy oil from Iran. Hopefully they will also buy a lot from the US," Trump said in a post on Truth Social.
Trump highlighted the absence of Iran's efforts so far to close the Strait of Hormuz for oil tankers, as the shutdown would be difficult for China, the world's largest Iranian oil importer.
"The president continues to ask China and all countries to import our advanced oil rather than import Iranian oil that violates US sanctions," a senior White House official told Reuters.
Following the ceasefire's announcement, Trump's statement about China was another bearish signal for oil prices, which fell nearly 6% on Tuesday.
Any easing of sanctions enforcement against Iran will mark a change in US policy after Trump said in February he would reimpose maximum pressure on Iran, aiming to push its oil exports to zero.
Trump imposed a wave of sanctions related to Iran on several independent oil refineries and Chinese port terminal operators buying Iranian oil.
"President Trump's green light for China to continue buying Iranian oil reflects the loose return of law enforcement standards," said Scott Modell, a former CIA official who is now the CEO of the Rapidan Energy Group.
Apart from not imposing sanctions, Trump could suspend or lift sanctions imposed under executive orders or under the authority granted by the president in a law passed by Congress.
Modell suspects Trump will likely not lift sanctions ahead of the next US-Iran nuclear negotiations round.
The measures provide leverage given Tehran's request for any agreement to include the permanent lifting of sanctions.
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Oil traders and analysts in Asia said they did not expect Trump's statement to have a short-term impact on oil purchases by China both from Iran and the US.
Iran's oil accounts for about 13.6% of China's oil purchases this year, with discounted barrels providing assistance to independent oil refineries that lack margins.
US oil only accounts for 2% of China's imports, and Beijing's 10% tariff on US oil blocks further purchases.
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