China's Angst over Iran Sanctions

Article:To Appear in Middle East Economic Survey (MEES)- Op-Ed http://www.mees.com/cms/
China's Angst over Iran Sanctions
Beijing’s go-it-alone oil security could fail during any U.S.-Iran conflict
Thomas W O'Donnell, PhD

China isn't happy with the fact that the U.S. has "targeted" sanctions on Iran's nuclear program, which have the potential to interrupt oil supplies to China. This poses a problem because 50% of China's oil comes from the Persian Gulf. If China decides to side with the U.S. and sanction Iran it could cut china's supply which amounts to about 500,000 barrels per day.

China is in the process of building two storage facilities that will hold 100 million barrels of oil in anticipation of possible supply loss. The problem with the reserves is that they amount to only about a month's worth of China's imports.

As a fall back China needs to decide if it wants to join the IEA reserve system. This has the potential to undermine China's "Go Abroad" strategy, the idea of this strategy is for China to be completely independent of all other countries, including OPEC and the OECD which would make China subject to the U.s.