Hong Kong Reserves Right to Assist Iranian Oil Shipment

The government of Hong Kong has rejected a warning from the U.S. Department of State that it could be penalized if it does business with a specific tanker, the Pacific Bravo, which is believed to be under way for China. 

According to the Bravo's Equasis record, she is operated by Chinese state-owned giant COSCO Shipping, and her registered owner shares a working address with a COSCO entity in Dalian. The Bravo was purchased by a holding company, transferred to COSCO's management, reflagged and renamed in January.

A U.S. official told Reuters that the real owner of the Bravo is the Bank of Kunlun, itself a subsidiary of China National Petroleum Corp.'s banking division, CNPC Capital. State-owned Bank of Kunlun is believed to be the main financial institution for business transactions between China and Iran. 

On Wednesday, a spokesperson for Hong Kong's Commerce and Economic Development Bureau told Bloomberg that the city complies strictly with the UN Security Council sanctions on Iran. The UN's limits on Iranian trade fall far short of the sweeping U.S. sanctions measures, and the spokesperson noted that the UNSC imposes no "restrictions on the export of petroleum from Iran."

Until the Trump administration reimposed strict American sanctions on Iran last August, China and India were Iran's largest overseas customers for oil. While they have halted shipments, there are signs that the trade could resume. A tanker with a transshipped cargo of Iranian oil offloaded at a terminal in Zhoushan, China earlier this month. In India, the government of Prime Minister Narendra Modi - who just won reelection - is expected to begin talks with Iran to buy its oil using rupees rather than dollars for payment. By using rupee-denominated payment, India would bypass restrictions on the use of the American financial system for trade with Iran.