Amirreza Etasi
What would happen if Iranian oil – a heavily sanctioned but vital supply for China – suddenly stopped flowing?
US pressure and the possible “snapback” of UN sanctions could choke off Iran’s clandestine crude exports, testing Beijing’s energy security, raising costs for its industry and dealing a financial blow to Tehran in a high-stakes geopolitical showdown.
Iran’s oil exports have rebounded sharply in recent years despite US sanctions over its nuclear program. After plunging to a 40-year low of about 0.4 million barrels per day (mbpd) in 2020, exports recovered to roughly 1.4 mbpd in 2023 and peaked near 1.5 mbpd in 2024.
However, this has since seen a reduction in 2025 following regional crises, with sales decreasing again. Despite this volatility, China’s dominance as a buyer remains absolute, purchasing roughly 90% of Iran’s total exports.
To entice buyers, Iran sells its oil at steep discounts on market rates. In late 2023, its flagship crude traded at about $13 per barrel below the Brent benchmark, according to Reuters, a staggering 15% discount that saved Chinese buyers an estimated $10 billion in 2023 on their total sanctioned oil imports.
This trade is facilitated by a “dark fleet” of tankers that disguise their origin, often relabeling Iranian crude as Malaysian. As a result, while China’s official customs data shows no imports from Iran, its imports from “Malaysia” have surged far beyond that country’s actual production capacity, revealing the scale of this clandestine trade.
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