Chinese state-owned oil companies told to stop buying oil from Iran, for now

China’s government has told at least two of its state oil companies – China National Petroleum Corp and Sinopec – to avoid purchasing Iranian oil. The move comes ahead of a US imposition of sanctions on Iran, Bloomberg reported, citing unnamed people with knowledge of the matter.

The freeze was temporary; purchases might resume, depending on the outcome of negotiations with the US, the sources said.

The US sanctions will enter into force on November 4th. Companies that continue buying Iranian crude after that date face the risk of being cut off from the American financial system.

The Chinese decision came ahead of a meeting between President Xi Jinping and U.S. counterpart Donald Trump at the Group of 20 summit next month.

For Iran, no purchases by CNPC and Sinopec would mean losing sales to its top oil customer. Other major buyers such as Japan and South Korea have also cancelled deals.

Reuters had reported earlier that the companies made no bookings for November-loading Iranian oil.

Nearly all nations that had been importing oil from Iran have been negotiating with the US for waivers from the restrictions since the current US administration made the surprise announcement in May that the 2016 suspension of sanctions would not be renewed, with a reimposition of economic curbs lifted under a 2015 agreement between the US and Iran.