Iranian oil exports to China surged to 1.91 million barrels per day in March 2025
The primary actors are the Islamic Republic of Iran and the People’s Republic of China. Iran exports crude oil despite international sanctions, especially U.S.-imposed ones. China continues to import Iranian oil, often through indirect channels or re-flagged tankers, circumventing enforcement mechanisms. Secondary actors include S&P Global (as the reporting entity), the U.S. government and its sanctioning bodies (OFAC), and maritime actors (such as shipping companies and insurance entities).
Iranian oil exports to China surged to 1.91 million barrels per day in March 2025, the highest monthly volume in recent history. This increase occurred despite ongoing U.S. sanctions on Iranian crude exports and targeted actions against tankers involved in these transactions. China’s imports reflect not only evasion tactics but a deepening energy relationship with Iran. Much of the oil is relabeled as originating from Malaysia, Oman, or the UAE, often via ship-to-ship transfers and ghost tankers with disabled AIS transponders.
The high volume of Iranian crude entering Chinese ports undermines the enforcement credibility of U.S. sanctions. It signals a growing willingness by Beijing to disregard U.S. extraterritorial pressure, especially as U.S.-China tensions rise in trade, technology, and security. Iran’s oil revenues, bolstered by these exports, fund its regional activities in Lebanon, Syria, Iraq, and Yemen, including proxy support and weapons programs. The influx of funds also stabilizes Iran’s economy amid currency depreciation and inflation. This trend undercuts Western strategic leverage over both Tehran and Beijing and accelerates the erosion of the dollar-centric oil market.
Multiple converging factors explain the timing. China seeks to diversify its energy sources and secure discounted crude in light of global price volatility. Iran, suffering under economic strain, aggressively boosts exports to maintain regime stability ahead of potential internal unrest and to fund its expanding military-industrial programs. U.S. enforcement capacity has also been diluted by global shipping volumes and geopolitical priorities elsewhere, such as the war in Ukraine and tensions in the South China Sea. Additionally, the decline in maritime domain awareness and the proliferation of dark fleet logistics have provided Iran with an opening to scale operations.
Iran uses a fleet of aging, reflagged tankers operating in opaque maritime zones such as the South China Sea, Strait of Malacca, and waters near Singapore. These ships perform ship-to-ship transfers, forge documentation, spoof identities, and often declare false cargo manifests. Chinese independent refiners, known as “teapots,” play a significant role by receiving discounted Iranian blends under misrepresented origins. Transactions often use barter, yuan settlements, or crypto mechanisms to avoid SWIFT-traced financial systems.
Iran’s oil export revenues have risen steadily, allowing the government to partially stabilize its budget, pay for essential imports, and continue strategic programs. It has reduced internal pressure on the rial and curbed inflation temporarily. China, in turn, benefits from cheaper crude amid its post-COVID economic recovery and strategic stockpiling. However, U.S. attempts to isolate Iran economically appear weaker, and the sanctions regime increasingly lacks global cooperation. Enforcement measures are becoming reactive and symbolic, not preventive. Regional actors like the UAE and Oman are implicated indirectly, risking friction with Washington.
Barring major geopolitical disruptions or forceful maritime interdiction efforts, Iranian oil exports to China will remain above 1.5 million barrels per day through mid-2025. The U.S. is unlikely to escalate maritime enforcement significantly without risking confrontation with China. Iran will continue refining its sanctions evasion tactics with Chinese logistical and financial collaboration. A possible BRICS+ energy framework may formalize this behavior, weakening the petrodollar and accelerating alternative settlement systems such as China’s CIPS and digital yuan. Expect U.S. influence over global energy governance to further decline, while Iran strengthens its strategic autonomy. Regional tensions will likely rise as Iranian funding for proxy groups increases in parallel with oil revenue. Over the longer term, a dual oil market—sanctioned and non-sanctioned—will emerge, fragmenting global supply chains and emboldening sanctioned states.
