In a matter of hours, President Donald Trump is set to announce his decision on the Iran nuclear deal. Many are expecting him to pull the United States out of the deal and restore sanctions against the nation.
Among the deal's signatories, China is likely to resist any unilateral American action, experts said.
Any sanctions on Iran would have a "negligible effect on China's buying attitude," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years.
One of the world's fastest growing markets for oil consumption, China "needs the oil," and trade tensions with the U.S. would make Beijing even less likely to support sanctions from Washington, said Victor Shum, vice president of the energy group at IHS Markit.
"With trade skirmishes between the U.S. and China and all kinds of political issues, I see the resistance from Chinese crude buyers to comply [to U.S. sanctions against Iran]," added Shum.
Even so, China will try to keep its response measured as the world's second-largest economy continues its bilateral trade negotiations with the U.S., said Benjamin Lu, an investment analyst for commodities at Phillip Futures.
The Chinese Foreign Ministry signaled last Wednesday that it wasn't in support of the U.S. quitting the deal, but stopped short of criticizing any specific country.
Should the U.S. withdraw from the Iran nuclear deal, the Trump administration must decide on whether to wield powerful U.S. sanctions to punish countries that continue to do business with Iran.
Still, the market will find ways to circumvent any sanctions, such as transferring supplies between floating storage, using barter trade, or not using U.S. banks, according to analysts.
"The market will be resourceful," said Driscoll.
For instance, Iranian traders have the option of trading in Chinese yuan-denominated crude oil futures on the Shanghai International Energy Exchange — circumventing any restrictions on dollar-denominated trade and U.S. banks.
Shum and Lu, however, said such a development may not be that immediate or apparent, as Shanghai oil futures trade is still a largely domestic affair. Beijing also would not want to be seen to be openly pushing back on U.S. sanctions as it negotiates bilateral trade with Washington, said Lu.