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US Ban on Iranian Oil Turns into ‘Bargaining Chip’

US Ban on Iranian Oil Turns into ‘Bargaining Chip’
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US Ban on Iranian Oil Turns into ‘Bargaining Chip’

US Ban on Iranian Oil Turns into ‘Bargaining Chip’

US politicians have been so far unable to convince many of their allies to cut their purchases of Iranian oil to zero by November 4.

Analysts say that the allies are seeking to clinch "the greatest gains” possible, especially in light of tariff battles between the US and a large number of economic blocs, turning the whole thing into a "bargaining chip.”

The United States has not received sufficient guarantees from India, China and the European Union despite President Donald Trump’s warning to all countries that will continue to buy Iranian oil after November 4.

But some states such as Japan, South Korea and Taiwan complied with the US decision, and many companies, especially Japanese ones, have begun to reduce their shipments of Iranian oil early this month.

India, the second biggest crude customer for Iran, may cut its imports from the Islamic republic by half to secure a waiver from the US to continue with shipments, people familiar with the matter told Bloomberg on Tuesday.

Officials from the US had discussed the issue of a conditional waiver on sanctions in talks last month in New Delhi, they said.

According to Bloomberg, the sources said India has expressed its inability to scrap oil imports from Iran completely as its supplies are being offered at competitive rates. New Delhi expects a response as early as next month when talks resume.

In China, the US has been facing some difficulties to persuade the country to cut Iranian oil imports, according to two officials familiar with the negotiations, Bloomberg reported.

Beijing has, however, agreed not to ramp up purchases of Iranian crude, the officials said.

November 4 is expected to be the beginning of long rounds of negotiations to reduce the purchase of Iranian oil to “zero” instead of being the date of implementation of the second round of US sanctions.

In the past, the Obama administration managed to remove 1.2 million barrels per day of Iranian oil from the market under the ban that was imposed in 2012.

Last Friday, Bloomberg quoted US sources as saying that the White House has now begun to adjust its target quantity of reduced Iranian oil exports to the world.

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China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
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20
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China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)

China's economy is likely to have cooled in the second quarter after a solid start to the year, as trade tensions and a prolonged property downturn drag on demand, raising pressure on policymakers to roll out additional stimulus to underpin growth.

The world's No. 2 economy has so far avoided a sharp slowdown in part due to a fragile US-China trade truce and policy support, but markets are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low.

Data due Tuesday is expected to show gross domestic product (GDP) grew 5.1% year-on-year in April-June, slowing from 5.4% in the first quarter, according to a Reuters poll. The projected pace would still exceed the 4.7% forecast in a Reuters poll in April and remains broadly in line with the official full-year target of around 5%.

"While growth has been resilient year-to-date, we still expect it to soften in the second half of the year, due to the payback of front-loaded exports, ongoing negative deflationary feedback loop, and the impact of tariffs on direct exports to the US and the global trade cycle," analysts at Morgan Stanley said in a note.

"The third-quarter growth could slow to 4.5% or lower, while Q4 faces unfavorable base effect, putting the annual growth target at risk," the analysts said. They expect Beijing to introduce a 0.5-1 trillion yuan ($69.7 billion-$139.5 billion) supplementary budget from late in the third quarter.

China's exports regained some momentum in June while imports rebounded, as factories rushed out shipments to capitalize on a fragile tariff truce between Beijing and Washington ahead of a looming August deadline.

GDP data is due on Tuesday at 0200 GMT. Separate data on June activity is expected to show both industrial output and retail sales slowing.

On a quarterly basis, the economy is forecast to have expanded 0.9% in the second quarter, slowing from 1.2% in January-March, the poll showed.

China's 2025 GDP growth is forecast to cool to 4.6% - falling short of the official goal - from last year's 5.0% and ease even further to 4.2% in 2026, according to the poll.

BALANCING ACT

Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year.

Analysts polled by Reuters expect a 10-basis point cut in the seven-day reverse repo rate - the central bank's key policy rate - in the fourth quarter, along with a similar cut to the benchmark loan prime rate (LPR).

Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from US President Donald Trump's trade tariffs.

But China observers and analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years.

Expectations are growing that China could accelerate supply-side reforms to curb excess industrial capacity and find new ways to boost domestic demand.

It's a stiff challenge, analysts say, as Chinese leaders face a delicate balancing act in their quest to cut production while maintaining employment stability in the face of a worsening labor market outlook.