China defends commercial oil deal with Iran

BEIJING, Dec 11 (Reuters) - China swiped aside U.S. complaints about a major oil deal with Iran on Tuesday, saying the agreement was no other government's business.

Sinopec (0386.HK: Quote, Profile, Research), China's biggest oil refiner and petrochemicals producer, signed a deal over the weekend to invest $2 billion in Iran's Yadavaran oil field.

The deal, coinciding with Western efforts to pressure Iran with threats of tighter sanctions to rein in its nuclear programme, drew a swift rebuke from Washington.

"This is commercial cooperation in the energy sphere undertaken by a Chinese company with Iran following the principle of equality and mutual benefit," Chinese Foreign Ministry spokesman Qin Gang told a news conference.

"As commercial cooperation, a government doesn't have to and shouldn't comment or even speak ill of this."

The deal and verbal volleys have highlighted tensions over Iran between Washington and Beijing, which looks to the Middle Eastern power as a major oil supplier and export market.

"Major new deals with Iran, particularly ones like these involving investment in oil and gas, really undermine international efforts to pressure the Iranians to comply with obligations already in place under the U.N. Security Council resolutions", said State Department spokesman Jessica Simon.

Since publication early this month of a U.S. intelligence assessment saying it appeared likely that Iran had stopped a nuclear weapons programme four years ago, China's stance has been ambiguous.

Chinese diplomats have repeated stock calls for negotiations, leaving unclear whether Beijing would wield its power as a permanent member of the U.N. Security Council to veto new sanctions demanding that Iran stop uranium enrichment.  Continued...