Iranian oil exports to China have made a remarkable recovery following a temporary slump caused by an intensified U.S. sanctions effort. The Biden administration launched a crackdown in late 2024, targeting tankers, trading entities, and shipping firms involved in the sanctioned oil trade. This led to a sharp decline in January exports. However, Iran quickly adapted, leveraging ship-to-ship transfers and opening new receiving terminals, resulting in a significant rebound. According to Kpler data cited by Bloomberg, February exports are averaging 1.74 million barrels per day—an 86% increase from the previous month.
The U.S. Crackdown: A Short-Lived Disruption?
The U.S. has long sought to curb Iran’s oil exports as a means of economic pressure, particularly as part of broader efforts to curtail Tehran’s nuclear ambitions. Treasury Secretary Scott Bessent has emphasized that Washington aims to reduce Iran’s oil exports to just 10% of current levels. “We are committed to bringing the Iranians to going back to the 100,000 barrels-a-day of oil exports,” Bessent stated in an interview with Fox Business. However, analysts argue that these efforts are unlikely to have lasting success, given Iran’s ability to adapt to sanctions and China’s continued willingness to purchase Iranian crude.
Trump’s Maximum Pressure Strategy: Lessons from the Past
Returning to office with a renewed commitment to maximum pressure, former President Donald Trump has promised to take stronger action against Iran’s oil exports. In his first term, Trump applied economic and geopolitical pressure to isolate Iran, a strategy that saw mixed results. Now, his administration is targeting not just Iranian oil shipments but also brokers, financiers, and shipping networks facilitating trade with China.
Trump has also issued threats of military action, though analysts believe these statements are largely rhetorical. “Military action against Iran is deemed too risky and costly for any U.S. administration,” one report noted, citing concerns about Iran’s underground nuclear facilities, its potential retaliation against Israel and U.S. forces, and the overall instability such an attack could cause. Instead, Trump is focusing on economic measures, particularly pressuring China to cut off its oil imports from Iran.
China’s Energy Independence vs. U.S. Pressure
China has long resisted foreign influence in its trade policies, and Iranian oil is no exception. Hamed Vafayi, a China expert and professor at the University of Tehran, argues that Beijing’s foreign policy operates independently of U.S. demands. “Looking at China’s foreign policy, we see that Beijing does not allow a third country to influence its bilateral ties,” he said, highlighting how China remains the largest economic partner of both South and North Korea despite their conflict. Similarly, China maintains strong trade ties with both Iran and Saudi Arabia, even brokering a rapprochement between the two rivals in 2023.
China’s private oil refiners, known as “teapots,” play a key role in these transactions. These refiners benefit from cheap Iranian crude, which is available at a discount due to U.S. sanctions. However, some of these refiners may hesitate to engage in sanctioned trade due to rising costs associated with evading U.S. scrutiny. “Some buyers, particularly larger Chinese privately owned refiners, are likely to steer clear of such dealings as a precaution in the near term,” Kpler analyst Homayoun Falakshahi noted, emphasizing how additional costs and risks could temporarily impact the market.
The U.S. Approach: Targeting Shipments and Trade Networks
Trump’s administration has expanded its sanctions efforts beyond individual tankers, targeting entire networks that facilitate Iran-China oil trade. According to sources familiar with the sanctions strategy, Washington is identifying tankers engaged in ship-to-ship transfers—particularly in Malaysian and Indonesian waters—where Iranian oil is often disguised before reaching Chinese ports. The U.S. has also pressured financial institutions involved in these transactions, hoping to choke off funding for the illicit trade.
Yet, despite these measures, history suggests that China and Iran will continue to find ways to circumvent sanctions. In 2020, similar efforts led to reports that China had stopped importing Iranian oil. However, investigations revealed that Iranian crude continued flowing into Chinese storage facilities under different names. Iranian officials have openly boasted about their ability to evade sanctions. “If there is an art that we have perfected in Iran, [that] we can teach to others for a price, it is the art of evading sanctions,” former Iranian Foreign Minister Mohammad Javad Zarif declared in 2018. Iran’s former Petroleum Minister, Bijan Zangeneh, also acknowledged that Iran alters documents and shipment specifications to disguise its crude oil exports.
Can Trump Force China’s Hand?
For Trump’s strategy to succeed, he must persuade Beijing to cut off Iranian oil imports—a daunting task. Some of his advisors suggest using tariffs or leveraging the Taiwan issue to force compliance, while others believe offering concessions might be more effective. However, Trump’s track record suggests he is unlikely to take a conciliatory approach.
Majid Shakeri, an economic analyst, points out that previous attempts to cut Iran off from the Chinese market have failed. “Since the so-called maximum pressure campaign began in 2018, there have been two distinct periods when the U.S. attempted to restrict Iran’s oil supply to China,” he explained. “In both cases, sales decreased temporarily, but they regained momentum even without Washington easing the pressure.”
China also has strategic reasons to maintain its relationship with Iran. “The substitutes for the approximately 15 percent of China’s oil consumption reportedly sourced from Iran are either the U.S., its closely allied and controlled Arab states, or Russia,” Shakeri noted. “In either case, Beijing is unwilling to risk increased dependence. China prioritizes diversifying its energy sources. Purchasing oil from the American group could allow the U.S. to gain a pressure tool. Furthermore, Beijing also seeks to avoid greater dependence on Russia, given the two superpowers’ rivalry in certain areas.”
The Future of Iran-China Oil Trade
The U.S. crackdown has momentarily disrupted Iranian oil exports, but past experience suggests these efforts will not permanently halt the trade. As long as China continues prioritizing energy security and Iran remains determined to sustain its economy, their oil partnership will endure. The Trump administration may impose harsher sanctions, but Iran’s established networks for evading restrictions—and China’s strategic interests—suggest that the flow of crude will continue, albeit with occasional fluctuations. The battle over Iranian oil exports is far from over, and its outcome will have lasting geopolitical consequences.