On Nov. 4, the U.S. will re-impose sanctions on Iran that had been lifted under the Iran nuclear deal. In response, the Bank of Kunlun, which handles China’s financial transactions with Iran, informed customers that on Nov. 1 it will stop processing them. China’s largest oil refiners, Sinopec and China National Petroleum Corporation (CNPC), may also stop importing Iranian oil in November.
Why it matters: China is Iran’s largest oil importer and most important trading partner. Because China is better insulated from U.S. sanctions than other major importers, Iran could avoid the worst economic effects of U.S. sanctions if China continues buying its oil. But if China cuts back, Iran will likely pull out of the nuclear deal, leaving it free to resume an unrestricted nuclear program.