Sanctions Stranglehold: How China’s Iran Oil Trade Continues to Thrive

By Serene Cheong

March 8, 2025 (Bloomberg) – Ongoing sanction measures targeting entities and vessels allegedly supporting Tehran are beginning to hinder the flow of Iranian oil to China. This is occurring as costs escalate, forcing traders into precarious strategies to bypass U.S. restrictions.

In recent weeks, Chinese private refineries—key purchasers of Iranian cargoes—have reported disruptions in shipments due to a series of seller defaults. Although no specific reasons were disclosed, executives attributed these issues to logistical hurdles and rising operational costs affecting the supply chain.

The situation has been exacerbated by sanctions imposed on certain Iranian tankers while en route,further complicating matters for buyers who requested anonymity due to the sensitivity of the discussions.

The Impact of Sanctions on Trade Dynamics

China has historically relied on trade with Iran as its primary source for oil imports; however, this relationship is under increasing scrutiny from Washington. Following recent sanctions targeting tankers and their operators, over two-thirds of approximately 150 vessels involved in transporting Iranian crude last year have now been blacklisted by U.S. authorities according to Kpler’s data