As China's oil imports climb to new highs, it appears to be walking a fine line to avoid U.S. penalties for dealing with Iran.
Despite its shift to evade sanctions, China remains dependent on Middle East oil, posing potential problems if the Syrian crisis spreads.
In July, China cut its crude oil imports from Iran to some 397,000 barrels per day, putting it close to an unofficial target for reductions this year, Reuters reported.
Representative Royce has already called on Congress to close the loophole by broadening the definition of oil in sanctions legislation.
"This is widely recognized as a loophole that you can drive an Iranian oil tanker through," said Mark Dubowitz, executive director at the Washington-based Foundation for Defense of Democracies, according to the Journal.
Customs data shows that China has reduced its fuel oil imports from other suppliers including Singapore, South Korea and Malaysia while increasing purchases from Iran.