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U.S. To Scale Up Sanctions On Iran’s Key Financier China

By Simon Watkins - Aug 05, 2025, 11:00 AM CDT
The U.S. aims to cut Iran's oil exports to near zero to deny funding for its nuclear program and weaken the Islamic Revolutionary Guard Corps (IRGC), with China being a key enabler by importing Iranian oil.

Despite U.S. sanctions, China continued to increase oil imports from Iran, using methods to bypass official customs data, and maintained operational independence through institutions like the Bank of Kunlun.

The U.S. is intensifying sanctions, targeting Chinese entities involved in trading Iranian oil and petrochemical products, with more measures expected to further restrict Iran's revenue sources.
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The U.S.’s short-term objective on Iran is for it to have zero enriched material that could be used to make a nuclear weapon. Its long-term objective is to remove from power the key element behind the drive for such armaments – the Islamic Revolutionary Guard Corps (IRGC). Its principal mechanism to achieve these aims is to deny Iran funding, and as the core of its financing comes from oil exports, the U.S. wants to cut these to as near to zero as possible. Cue China – the biggest importer of Iranian oil and therefore, in effect, Iran’s chief enabler. As a very senior legal source who works closely with the U.S. agencies involved in sanctions on Iran and its allies exclusively told OilPrice.com recently: “We want to put Beijing back in its box when it comes to Iran and the Middle East, as part of neutering the threat from China and its allies more broadly.” Last week saw Washington move to do just this, as part of a scalable ladder of sanctions against Iran’s key supporters – China now very much included – to come. But will these efforts succeed?

Back in 2018, just after the U.S. had unilaterally withdrawn from the Joint Comprehensive Plan of Action (JCPOA, or colloquially ‘the nuclear deal’), Washington stated that its aim was to reduce Iran’s oil sanctions ‘to zero’ and subsequent statements out of Washington were a virtual countdown of various benchmark levels through which Iran’s oil exports supposedly dropped from their previous position at that time of around 2.5 million barrels per day (bpd). On the other side of this version of reality was the fact that China on its own was importing nearly 1 million bpd from Iran, and the trend was rising rapidly as the global oil market discounts on Iranian oil increased. Beijing’s interest in continuing to increase these imports from Iran was further boosted by the multi-layered benefits of the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and also fully detailed in my latest book on the new global oil market order. Even after the U.S. refused to extend China’s waiver on importing Iranian oil in May 2019, Beijing continued to increase its oil imports from Iran. Figures from China’s General Administration of Customs (GAC) at the end of August 2019 showed that China had imported 926,119 bpd of Iranian oil in July, up 4.7% month on month, from an already high base. Indeed, according to various oil industry sources in Iran exclusively spoke to by OilPrice.com at the time, the actual figure was much higher.