Iran's deputy foreign minister says progress has been made in Vienna talks aimed at saving the 2015 nuclear deal with world powers but the demands of the Islamic Republic are yet to be met.

"It was a step forward, but it is still not enough and not meeting Iran’s expectations," Abbas Araqchi told reporters on Friday after almost four hours of talks with senior diplomats from Britain, China, France, Germany and Russia.

On Friday, the remaining signatories of the nuclear agreement met in the Austrian capital as a last-ditch effort to save the accord after the US withdrew last year. 

US President Donald Trump withdrew Washington in May 2018 from the multilateral nuclear accord, officially known as the Joint Comprehensive Plan of Action (JCPOA), which was reached between Iran and six world powers in 2015.

Afterwards, Washington re-imposed unilateral sanctions on Iran that had been lifted under the deal.

European signatories to the nuclear deal are facing a two-month ultimatum to help Iran navigate US sanctions or see Tehran take the second step of reducing its commitments on July 7.

In early May, Tehran suspended limits on its production of enriched uranium and heavy water, moves that did not technically violate the deal but signaled that its patience was wearing thin.

Referring to Iran's decision to go over the deal's core atomic restrictions, Araqchi said, "The decision to reduce our commitments has already been made in Iran and we continue on that process unless our expectations are met."

"I don’t think the progress made today will be enough to stop our process but the decision will be made in Tehran," he added.

'INSTEX operational'

Araqchi said the Europeans have confirmed that the planned INSTEX trade mechanism is now “operational” and the first transactions are already processed.

However, the Iranian official added that this was still insufficient because European countries were not buying Iranian oil.

"For INSTEX to be useful for Iran, Europeans need to buy oil or consider credit lines for this mechanism otherwise INSTEX is not like they or us expect," he said.

The European Union also issued a statement, saying the special trade channel was up and running

"France, Germany and the United Kingdom informed participants that INSTEX had been made operational and available to all EU member states and that the first transactions are being processed," sad the statement.

The trade mechanism was established last year after the US' withdrawal from the JCPOA.

France, Germany and Britain had been tinkering with INSTEX for months without making it operational, leaving Iran wondering whether they are serious about the idea. 

In a joint statement earlier on Friday, Austria, Belgium, Finland, the Netherlands, Slovenia, Spain and Sweden, said they were working with the E3 to develop trade mechanisms.

Araqchi said all the parties in Vienna had agreed to hold a ministerial meeting "very soon."

China to continue to import Iranian oil

China has rejected the imposition of unilateral US sanctions on Iran, saying it would import Iranian oil in defiance of Washington’s bans on Tehran.

"We reject the unilateral imposition of sanctions," said Fu Cong, the director general of the Chinese Foreign Ministry's Department of Arms Control, on Friday.

Cong made the remarks a day before US and Chinese leaders are to meet on the sidelines of the G20 summit in Japan in an attempt to resolve trade disputes.

"For us energy security is important and the importation of oil is important to Chinese energy security and also to the livelihood of the people," said Cong.

The Trump administration said on April 22 that, in a bid to reduce Iran's oil exports to zero, buyers of Iranian oil must stop purchases by May 1 or face sanctions. The move ended six months of waivers, which allowed Iran’s eight biggest buyers -- Turkey, China, Greece, India, Italy, Japan, South Korea and Taiwan -- to continue importing limited volumes.

"We do not accept this so-called zero policy of the United States," said Cong, who was speaking on the sidelines of a meeting on the implementation of the Iranian nuclear deal.

The United States' insistence on zeroing out Iran's oil exports has caused many problems in the global market, keeping confused both experts and buyers as they look straight into what is shaping up to be a chaotic chapter for the petroleum industry.

China and several other major purchasers of Iranian oil have already complained to the US about the decision.