U.S. bans exports to China's state-owned oil company

The Commerce Department on Thursday effectively banned exports to China’s state-owned oil company, adding the company that owns significant energy assets in the U.S. to its blacklist of foreign entities it says threaten U.S. national security.

Details: Commerce specifically cited the role of the China National Overseas Oil Corporation in building artificial islands in the South China Sea, a yearslong effort meant to bolster Beijing's territorial claims, as its reason for placing the company on its so-called entity list. U.S. companies will now have to apply for special permits to export goods to the state-owned company, known as CNOOC.

“China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to U.S. national security and the security of the international community,” Commerce Secretary Wilbur Ross said in a statement. “CNOOC acts a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes.”

A U.S. CNOOC subsidiary operates about 400,000 acres of oil and gas fields in Wyoming, Colorado and Texas. It also owns stakes in oil development projects in the U.S. Gulf of Mexico.

A person answering the phone for CNOOC’s office in Houston declined to comment.

In a separate action, the Commerce Department also announced it was imposing new export controls on any U.S. technologies and individuals who may be supporting foreign military-intelligence uses and users in China, Cuba, Russia, and Venezuela, as well as in terrorist-supporting countries.

The Bureau of Industry and Security also is enhancing controls to prevent U.S. citizens from supporting unauthorized weapons of mass destruction programs, including weapons delivery systems and production facilities, the department said.

Context: The Trump administration’s adding CNOOC to the entity list is the latest effort to ramp up tensions with China ahead of President-elect Joe Biden's inauguration on Jan. 20.

The administration previously banned imports of some goods from China’s Xinjiang province, citing the persecution of the Uighur minority in the region. It also lifted a decades-old ban on U.S. diplomats interacting with their counterparts in Taiwan, a move that is sure to upset the Chinese government.

What's next: The incoming Biden administration will have to decide how or whether to unwind these moves.

Doug Palmer contributed to this report.