ACTIONS LOUDER THAN WORDS
"The Administration likes to pat itself on the back for supposedly being strong on Iran sanctions," said Republican Ileana Ros-Lehtinen, the chairman of the House Foreign Affairs Committee.
"But actions speak louder than words, and today the Administration has granted a free pass to Iran's biggest enabler, China," she said.
The administration, however, is probably "prepared to take that risk because it would want to avoid a major diplomatic spat with Beijing" over the sanctions, said Mark Dubowitz, the head of the non-profit group Foundation for Defense of Democracies, which advocates tough sanctions on Iran.
Tension over sanctions had driven oil prices higher early this year, but the impact has faded.
"The oil market has already priced this in as the assumption was that China would be able to continue trading with Iran regardless," said Societe Generale's global head of oil research, Michael Wittner.
Some Iranian ships have turned off tracking devices, according to oil market sources, leaving open the question of whether China and other countries are importing crude that has gone undetected.
"I think we basically witnessed a game of chicken between the U.S. and China and the Obama administration flinched first," a Senate Republican aide said, speaking on background.
To renew its exception six months from now China will have to prove without doubt it has cut purchases from Iran, said Democratic Senator Robert Menendez, who helped craft the sanctions law. "We will expect to see additional significant reductions by China and other nations."