January 31, 2020 / 1:28 AM / a month ago

U.S. to lift Iran-related sanctions on units of Chinese shipper COSCO -sources

WASHINGTON/LONDON Jan 30 (Reuters) - The United States will likely lift sanctions within days on units of Chinese tanker company COSCO that Washington accused of transporting Iranian oil, two industry sources said.

A source with a major Chinese oil company said they had received indications that COSCO had been taken off the U.S. sanctions list. The Chinese energy industry was waiting for official communications from Washington, the source said.

Another energy industry source in London said that Washington had indicated it would soon lift the sanctions.

The U.S. Treasury Department declined comment. The State Department did not immediately respond to requests for comment.

The administration of U.S. President Donald Trump blacklisted the Dalian units of COSCO on Sept. 25 in a move that pushed global freight costs to record highs and disrupted shipping markets.

The Dalian COSCO units only have about 40 tankers, but Washington’s move led to confusion about whether sanctions applied to the parent company’s fleet of more than 1,000 ships.

The Treasury Department had twice issued waivers to allow companies to wind down dealings with the COSCO units, the latest of which is set to expire on Feb. 4, but shipping markets were still unnerved.

China is the lone major importer of Iranian oil despite Trump’s “maximum pressure” campaign on Tehran that includes cutting Iran’s oil revenue to zero. Trump began re-imposing sanctions on Iran’s vital oil exports after he unilaterally pulled the United States from the Iran nuclear deal in 2018.

It was unclear whether any lifting of the sanctions would mean that China or COSCO had agreed to the Trump administration’s urgings to stop taking Iranian oil.

Tensions between Washington and Beijing are thawing amid the signing of an initial trade deal this month, defusing an 18-month trade war that hurt global growth.

A top Chinese official had raised the COSCO issue in the trade talks, said one source who advises COSCO and is familiar with the Chinese government’s position.

U.S. Treasury Secretary Steven Mnuchin told Fox News earlier in January that he met with Chinese officials to talk about purchases of Iranian oil.

“They’ve cut off all of the state companies from buying oil, and we’re working closely with them to make sure that they cease all additional oil activities,” Mnuchin said.

Mnuchin said last week he expects to begin negotiations on a so-called Phase 2 trade deal soon, with both countries on the same page. (Reporting by Timothy Gardner, Daphne Psaledakis, and Humeyra Pamuk in Washington, and Dmitry Zhdannikov, Jonathan Saul in London; editing by Grant McCool)

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