oBVIOUSLY SANCTIONS VS iRAN WILL NOT WORK

China Sends Fuel to Iran as U.S. Sanctions Loom - Report

By REUTERS

Filed at 8:06 p.m. ET

LONDON (Reuters) - State-run Chinese companies have started supplying Iran with gasoline in a move that could undermine U.S. pressure on Iran to give up its nuclear programme, the Financial Times reported on Wednesday.

Iran is the world's fifth-largest crude exporter but imports up to 40 percent of its gasoline as it lacks the refining capacity to meet domestic demand.

The United States and its European allies may target Iran's fuel imports if it refuses to enter talks over its disputed nuclear programme by the end of this month.

Iran's oil minister said last week the country was ready for any fuel sanctions and had signed deals with other countries to purchase more gasoline.

Traders and bankers familiar with Iran's purchasing told the British business daily China had already started supplying the country through intermediaries.

"We estimate, based on what we are hearing in the market, that 30,000-40,000 barrels a day of Chinese petrol is making its way from the Asian spot market to Iran via third parties," the newspaper quoted Lawrence Eagles, head of commodities research at JPMorgan, as saying.

Trader said the sales were legal as fuel imports are not yet included in sanctions against Tehran.

Oil traders told Reuters in late August Iran's imports were likely to be steady at around 128,000 barrels per day in September.

The U.S. Senate in July voted to ban firms that sell gasoline to Iran from also receiving Energy Department contracts to deliver crude to the U.S. Strategic Petroleum Reserve.