US secretary of state Mike Pompeo. Picture: ANDREW HARNIK/ REUTERS
US secretary of state Mike Pompeo. Picture: ANDREW HARNIK/ REUTERS

Washington — The US has sanctioned the China’s state-run energy company Zhuhai Zhenrong for allegedly violating restrictions imposed on Iran’s oil sector, US secretary of state Mike Pompeo said in a speech on Monday.

“We’ve said that we will sanction any sanctionable behaviour, and we mean it,” Pompeo said in Florida.

The move comes amid increased tensions between Iran and the West as well as between the US and China, which have restarted major trade talks.

The Trump’s administration has stepped up its sanctions against Iran after breaking from the nuclear pact brokered between Tehran and other Western nations under the previous Democratic administration of president Barack Obama.

China’s embassy in Washington rejected Pompeo’s announcement.

“China firmly opposes the US imposition of unilateral sanctions and so-called ‘long-arm jurisdiction’ on China and other countries invoking its domestic law,” a spokesperson said by e-mail.

“We urge the US to immediately correct its wrongdoing and earnestly respect other parties’ legal rights and interests.”

Zhuhai Zhenrong, which specialises mainly in buying Iranian oil and is based in Beijing, was previously sanctioned in 2012 by the Obama administration over its dealings with Iran.

The company is now a subsidiary of Macau-based, state-controlled conglomerate Nam Kwong Group.

It is largely disconnected from the Chinese financial system, which limits the “contagion” of the sanctions from other entities and banking systems, analysts at ClearView Energy Partners said. But Washington’s move is another shot across the bow that reflects the seriousness of the Trump administration’s stance on Iran.

“We see the shot as being aimed just at China, but also at other potential buyers,” such as Turkey and possibly Russia, which could serve as a middleman for brokering oil from Iran to other countries, ClearView said.

The US reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers.

In June the US special representative for Iran, Brian Hook, said Washington will sanction any country that continued to import Iranian oil and warned that it would look at reports of Iranian crude going to China.

According to data from government and trade sources, Asia’s crude oil imports from Iran fell in May to the lowest in at least five years after China and India wound down purchases amid US sanctions, while Japan and South Korea halted imports.