US sanctions Chinese firms for allegedly shipping Iranian Oil – WSJ

Late on Wednesday in the US, the Wall Street Journal (WSJ) releases a news report saying that the Trump administration blacklisted several Chinese companies, including units of a state giant, for allegedly shipping Iranian oil in violation of the US sanctions.

The news report quotes Secretary of State Mike Pompeo while announcing the measures on the sidelines of a United Nations summit, “We’re telling China and all nations: Know that we will sanction every violation of sanctionable activity. Countries are indeed awakening to the truth that the more Iran lashes out, the greater our pressure will and should be.”

It was also mentioned in the news report that China still accounts for the majority of the estimated 500,000 barrels a day of oil Iran exported last month, according to Matt Smith, director of commodity research at the vessel tracker ClipperData. Beijing has also frustrated the administration’s attempts to squeeze Venezuela’s oil exports.

FX implications

The news can be considered as having mixed implications as it has a trade-negative factor and a positive catalyst for the Oil prices. While Oil has been witnessing a bit of action, no major reaction could be witnessed in the commodities or Antipodeans by the press time of early Thursday in Asia.