The Chinese-Iranian Oil ConnectionErica Downs and Suzanne Maloney
ERICA DOWNS is a Fellow at the John L. Thornton China Center  at the Brookings Institution. SUZANNE MALONEY is a Senior Fellow at the Saban Center for Middle East Policy  at the Brookings Institution.
For more than three decades, the United States has tried to persuade the international community to counter the threat posed by Iran's Islamic regime. The results have often been underwhelming, with even Washington's closest allies resisting tough measures against Iran because of strategic considerations and commercial interests.
Recently, however, that landscape has changed. Last June, the United Nations Security Council penalized Tehran for failing to suspend its uranium-enrichment program by adopting strict new sanctions, including an arms embargo and tough restrictions on Iranian banks and the Revolutionary Guard Corps. Resolution 1929 also paved the way for individual states to adopt even more stringent penalties. Australia, Canada, Japan, Norway, South Korea, and the European Union implemented unprecedented curbs on investment in Iran. The U.S. Congress passed new sanctions against any company selling gasoline to Iran or investing in Iran's refining capacity. Collectively, these measures have squeezed Iran's economy.
Yet one uncertainty still looms large: China's commitment to such policies. Driven by economic interests, as well as sympathy for Iran's grievances, China is the only major player still active in the Iranian oil patch. Whereas firms from most other countries have retreated due to international pressure and Iran's unfavorable business climate, China and its companies adhere only to the letter of Resolution 1929, which contains no explicit restrictions on energy investment or trade. China has thus emerged as the linchpin of the international sanctions regime against Iran and, by extension, of the effort to forestall Iran from acquiring a nuclear capability.
This situation presents U.S. policymakers with tough choices. Even as the U.S. political climate has turned more rancorous toward both Iran and China, the Obama administration will need to build a more positive partnership with China on the Iran issue while attempting to stabilize the broader bilateral relationship. One option is to exploit the underlying fissures that exist between Beijing and Tehran despite their strong ideological and commercial links.
THE CHINESE EXCEPTION