China and Iran

From Lebanon's Daily Star:

BEIJING: State oil giant Sinopec Group has signed a $70 billion oil field development and liquefied natural gas agreement with Iran, China's biggest energy deal with the No. 2 OPEC producer, an Iranian official said Friday.

The preliminary deal may yield political benefits far sooner than commercial ones as Iran courts China's favor on the UN Security Council, where Beijing holds a potential veto over any action against the Islamic Republic's nuclear program. [...]

Oil Minister Bijan Zanganeh is on his last day of a two-day visit to Beijing to pursue closer ties with China, whose biggest oil supplier is Iran, contributing 14 percent of imports.

Chinese companies have been prominent investors in the underperforming oil industry of OPEC's second-biggest producer, including Sinopec's construction of a huge oil terminal on the Caspian and deals to upgrade several refineries.

But Beijing has thus far been wary of incurring U.S. wrath through the Iran Libya Sanctions Act (ILSA), which threatens penalties for firms making big investments in Iran.

Iran denies U.S. claims its nuclear power program is a smokescreen for developing an atomic bomb, but its nuclear dossier is edging closer to the UN Security Council for possible sanctions.