WANA (Sep 22) – Iran has managed to increase its crude oil exports to China to 1.81 million barrels per day in recent months — about 22 percent higher than the 2024 average — despite ongoing U.S. sanctions.

 

For years, sanctions have severely restricted Iran’s oil trade. Yet new figures show Tehran has expanded sales to one of its largest customers, China, using a mix of sanction-busting mechanisms, logistical routes, and price incentives.

 

Sanctions Evasion and Logistics

Iran relies on a complex network of front companies, reflagged tankers, and frequent ship-to-ship transfers in Southeast Asian waters to deliver oil. Some shipments enter Chinese ports under the label of “mixed crude.” These tactics have limited the impact of U.S. secondary sanctions.

 

Pricing and Intermediaries

Much of Iran’s oil is sold through smaller intermediaries at a discount of $2–$5 per barrel compared to Brent crude. These discounts have attracted independent Chinese refineries, known as “teapots,” while some transactions are settled through yuan-based contracts or barter deals, reducing reliance on the dollar.

 

Revenue Impact

At 1.81 million barrels per day and an average oil price of $80, Iran’s gross revenue in March is estimated at $4.3 billion, with net revenue around $3.8 billion after discounts. This exceeds the government’s budget projection of 1.4 million barrels per day, creating several billion dollars in additional annual income.

 

Expert View

Economic analyst Sadegh Mohseni said the higher export volume demonstrates Iran’s resilience under sanctions. “The global market clearly has room for Iranian oil, even at a discount,” he explained.

 

He continued: “Discounts eat into part of the revenue. However, selling 1.8 million barrels with a $2–$5 discount is better than selling 1.4 million barrels without discounts. Right now, Iran’s oil economy depends on sales volume rather than maximizing price. With this policy, Iran secures its market share.”

 

Mohseni added: “The 2025 budget was drafted based on exports of 1.4 million barrels per day. With 22 percent higher sales, the government can generate several billion dollars in additional revenue annually. This surplus helps cover part of the structural deficit, reduces the need for borrowing or money printing, and also eases pressure on the foreign exchange market.”

 

Outlook

China’s demand for discounted Iranian crude remains strong, particularly among smaller refiners. However, geopolitical risks and the threat of tighter U.S. enforcement continue to hang over Iran’s oil strategy.

 

For now, the increase reflects Tehran’s ability to adapt under pressure — gaining temporary fiscal relief, though without resolving deeper budgetary imbalances.

WANA - Iran and China