TEHRAN - The U.S. Department of State is mulling over allowing China to import oil from Iran as payment for a Chinese company’s investment in an Iranian oilfield, Politico reported on Wednesday, quoting three U.S. officials and sources.

According to the officials, the State Department is discussing an arrangement that would allow China to import Iranian oil as payment for the Chinese oil company Sinopec works on an Iranian oilfield.

“Administration officials have offered to issue a waiver for the payback oil in official correspondence between the State Department and Sinopec,” a source familiar with the situation said.

Since April when the United States announced that buyers of Iranian oil should stop purchases by May 1 or face sanctions, China has been constantly opposing Washington’s policies toward Iran and Chinese officials have repeatedly announced that they will continue purchasing oil from Iran.

In late June, China’s Jinxi Refining and Chemical Complex received a one-million-barrel cargo of Iranian oil in the first month after the Trump administration ended waivers permitting imports of Iranian oil.

Jinxi is owned and operated by PetroChina, which is affiliated to China National Petroleum Corporation (CNPC), a long-time buyer of Iranian oil and the parent company of Bank of Kunlun, the financial institution that has been at the heart of China-Iran trade for the last decade.

In May, Chinese Commerce Ministry announced the country’s opposition to unilateral U.S. sanctions against Iran, saying that cutting Iranian oil supplies will only worsen volatility in global energy markets.

Meanwhile, Reuters reported that Iran delivered 130,000t of fuel oil to China despite the U.S. sanctions.

Later in June, Bloomberg informed that China was still importing liquefied petroleum gas (LPG) from Iran after the U.S. imposed sanctions on the country’s oil industry.

According to ship tracking data, the Paris-based energy researcher Kpler SAS estimated that at least five supertankers loaded Iranian LPG in May and June heading for China.

China is Iran’s largest oil customer with imports of 475,000 barrels per day (bpd) in the first quarter of this year, according to Chinese customs data.

EF/MG