Iranian oil, arms, sanctions ... and "Crazy Yang"

Fri Jan 13, 2012 5:10am EST
 
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By Chen Aizhu

BEIJING (Reuters) - A Chinese firm hit by U.S. sanctions as Washington turns the screw on Iran's nuclear program was founded in the mid-1990s by a hard-drinking trader from a military background who regales dinner companions with how he spent much of his youth in a mental hospital.

Yang Qinglong, who calls himself "Crazy Yang," set up Zhuhai Zhenrong Corp in around 1995 after "high-level military friends" let it be known they wanted someone to formally import crude oil from Iran. At the time, Iran was supplying oil to China to pay for arms supplied by Beijing during the 1980-88 Iran-Iraq war.

Zhuhai Zhenrong, now headed by Zhang Dongquan, an altogether steadier upstream oil man from China's Yumen oilfield, was the biggest supplier of refined petroleum products back to Iran, according to the U.S. State Department, which has also slapped sanctions on two other energy trading companies.

The Chinese oil trader - which for years imported Iranian crude to sell to state-run refiners such as China Petroleum and Chemical Corp (Sinopec) and PetroChina - brokered the delivery of more than $500 million in gasoline to Iran between July 2010 and January 2011, contravening U.S. sanctions law, the State Department said.

Analysts say the U.S. sanctions are largely symbolic given that Zhenrong is unlikely to have much U.S. business exposure.

AN ACCIDENTAL TRADER

Yang, now in his 60s and an adviser to Zhenrong, got into the oil business by chance.

His home province of Yunnan, landlocked in China's southwest and near the Myanmar border, was so short of fuel in the early 1990s that local authorities offered officials cash if they could lay their hands on gasoline or diesel for the province.   Continued...