In the past five years, China has provided Iran with a financial lifeline by purchasing most of its oil. During the first Trump administration, the United States launched a “maximum pressure” campaign to cut Iranian oil from the global market and eliminate Tehran’s main source of income. Today, Iran sells billions of dollars in oil every month. For this, it can thank only one country: China. Tehran’s Asian partner has drastically increased the amount of Iranian oil purchased as sanctions tightened. Today it absorbs almost every drop produced by Iran, compared to about 30% a decade ago – writes the WSJ.
“ONE OF THE WORLD’S LARGEST SANCTIONS EVASION NETWORKS”
To make these purchases possible, Chinese buyers have worked closely with Iran to expand what U.S. officials and researchers describe as one of the world’s largest sanctions evasion networks. Payments are routed through smaller Chinese banks that have limited global operations and less to lose if sanctioned by the U.S., making them difficult to stop. Shell companies created by Iran in Hong Kong and elsewhere help manage the proceeds.
THE ROLE OF PRIVATE CHINESE REFINERIES
Private Chinese refineries, known as “teapots,” have become the main buyers of Iranian crude after state-owned Chinese energy giants, wary of angering Washington, abandoned the market. False invoices and mislabelled crude further masked the trade.
All these moves — outlined in U.S. sanctions documents, public indictments, and described by Western officials — have allowed Iran to earn tens of billions of dollars annually from China and launder them for use worldwide.
“Iran would not be able to fight this war without the years of support received from China,” said Max Meizlish of the Foundation for Defense of Democracies.
BEIJING’S POSITION
In a written response, the Chinese Ministry of Foreign Affairs stated it firmly opposes “illegal and unreasonable unilateral sanctions.” Behind the scenes, Beijing has been cautious to avoid openly violating sanctions so as not to provoke Washington’s ire, but unlike other nations, China has continued to find Iranian crude irresistible: it needs it for energy and can obtain it at discounted prices.
U.S. COUNTERMEASURES
The United States has sought to curb the trade but has been limited by the risk of driving up global oil prices and destabilizing Sino-U.S. ties. The evasion system has continued to operate even since the war began in Iran, despite Tehran effectively closing the Strait of Hormuz to Western shipments.
While Iran threatens U.S. allied vessels, its tankers continue to sail to Chinese ports. Officially, Chinese customs report no oil imports from Iran since 2023. However, research firm Kpler estimates that China purchased about 1.4 million barrels per day in 2025: more than 80% of Iran’s total sales and more than double compared to 2017.
MAXIMUM PRESSURE
When Trump took office, he abandoned Obama’s nuclear deal and launched his maximum pressure campaign. Iranian sales plummeted from nearly 2.8 million barrels per day in May 2018 to about 200,000 in August 2019. Iran responded by accelerating the construction of a clandestine trading network, creating companies with obscure names like Sahara Thunder and Sepehr Energy.
A key element was the expansion of a “shadow fleet” of tankers. Operators practice camouflage by changing vessel names, turning off position transmitters, and transferring crude from ship to ship at sea to hide its origin. A China-based network, founded in 2019, now counts at least 56 ships.
FILLING THE “TEAPOTS,” OR SMALL INDEPENDENT CHINESE REFINERIES
State giants like Sinopec and CNPC could not risk access to U.S. financial markets. But China has a network of small independent refineries — the “teapots” — that are less exposed because they pay for oil in yuan rather than dollars. Beijing has gradually increased import quotas for these non-state companies, from 140 million tons in 2018 to 257 million this year.
MONEY FLOWS THROUGH THE BANK OF KUNLUN
For payments, institutions like the Bank of Kunlun have been used. Sanctioned by the U.S. in 2012, this bank has become the go-to choice to facilitate trade with Iran in Chinese currency. According to the U.S. Treasury, a “significant portion” of Iranian oil revenues was deposited at this institution in 2022.
In some cases, there is no need to move money at all: a barter system is used where Chinese companies build infrastructure in Iran as compensation for oil. In 2024, about 8.4 billion dollars in oil payments passed through this channel.
(Excerpt from the foreign press review by eprcomunicazione)
