Iran-China oil flows surged as traders bypassed U.S. curbs, clearing cargo backlogs.More ship-to-ship transfers and new terminals drove the rise, traders said.February imports may hit 1.74M barrels/day, up 86% from January and the highest since October, per Kpler data.China has traditionally been the largest importer of Iranian crude, with the majority of shipments directed to its smaller, independent refiners, commonly known as teapots.
This trade remains a crucial revenue stream for Tehran but has faced mounting challenges due to successive rounds of U.S. sanctions. The situation has intensified further this month as the incoming Trump administration imposed stricter curbs on Iranian oil exports.Highlighting the growing pressure on Iran, U.S. Treasury Secretary Scott Bessent stated last week that Washington is aiming to reduce Iran’s oil exports to below 10% of their current levels.
He specifically called out China and potentially India as buyers of sanctioned Iranian crude, labeling these transactions as “unacceptable” during an interview with Fox Business.The increased scrutiny on Iranian oil shipments began escalating toward the end of last year, during the final months of the Biden administration.
In response, the U.S. has blacklisted and sanctioned numerous tankers, traders, and shipping firms involved in the trade, leading to heightened caution among buyers and logistics operators. However, the supply chain has shown remarkable adaptability, quickly finding ways to bypass restrictions.
According to market participants, traders have responded by employing unsanctioned tankers and establishing new shell companies to keep the flow of Iranian crude moving despite the intensified regulatory pressure.
