Hong Kong has dismissed US warnings that it could face sanctions if it permits a vessel carrying oil produced in Iran to stop at its port and utilise services, ejinsight reported on May 30.

The dismissal shows a certain coolness towards Washington’s effort, commenced at the start of May, to drive all Iranian oil shipments away from the world market—and it may be an early indication that the worsening of the trade war between the US and China has prompted the Chinese to show less cooperation with the ‘zero Iranian oil’ strategy adopted by the Trump administration. Analysts have come to regard the level of cooperation as something that Beijing may use as a bargaining chip in negotiations to end the trade war, despite the relative warmth in relations between China and Iran.

Hong Kong’s Commerce and Economic Development Bureau (CEDB) reportedly observed that the Hong Kong SAR (HKSAR) government has been strictly implementing sanctions decided by the UN Security Council on Iran since the United Nations Sanctions (under the nuclear deal, or Joint Comprehensive Plan of Action) Regulation was enacted.

But the CEDB said the UN Security Council has not imposed any restrictions on the export of petroleum from Iran, the Hong Kong Economic Journal reported.

While specific countries may impose unilateral sanctions against certain other countries based on their own considerations, those sanctions are not within the scope of the UN Security Council sanctions implemented by the HKSAR, the CEDB was cited as saying.

Washington warned Hong Kong to be on alert for the vessel, the Pacific Bravo, carrying Iranian petroleum, and added that any entity providing services to it would be violating US sanctions, Reuters reported.

The fully laden Pacific Bravo abruptly changed course on May 27 to head toward Sri Lanka, the news agency said, citing shipping data from Refinitiv Eikon. The vessel had earlier identified Indonesia as its intended destination, according to ship-tracking data, but cited industry sources said it was most likely going to China.

The Pacific Bravo reportedly on May 27 changed its automatic identification system (AIS) destination to Sri Lanka. It then meandered off the southern coast of the country for a little more than a day, the ship-tracking data was said to show.

Later, on the evening of May 28, the tanker sailed away from Sri Lanka toward the busy waterways of the Strait of Malacca, a key shipping lane toward East Asia, although its AIS destination was still set as Sri Lanka. A ship’s crew manually enters AIS destination settings, and there can be a delay in updates while the vessel is at sea.

The Pacific Bravo is owned by China’s Bank of Kunlun. The lender has served as the main official channel for money flows between China and Iran since before the last round of sanctions began in 2012. It is majority-owned by China National Petroleum Corp’s financial arm, CNPC Capital.

China is the top buyer of Iranian oil and nearly all its oil payments go through Kunlun.