The United States has imposed sanctions on a network of individuals and companies accused of facilitating the sale of millions of barrels of Iranian oil to China. This move is part of the Trump administration’s ongoing effort to cut Iran’s crude oil exports to zero.
The latest sanctions are aimed at sending a clear message to both Beijing and Tehran. While they signal an intent to apply pressure, they are also designed to avoid disrupting ongoing behind-the-scenes negotiations with Iran, which seek to limit its nuclear program.
Experts suggest that while these sanctions, which target individuals and vessels linked to Iran’s “shadow fleet”—ships that covertly transport sanctioned Iranian oil—may have an impact, they are unlikely to fully eliminate Iran’s oil exports. Stronger measures, such as targeting Chinese banks that process oil transactions, would be needed to achieve this. However, such actions could risk escalating tensions between the U.S. and China, the world’s two largest economies.
“This is a cautious step, not because Trump is taking it slow, but because it’s meant to send a message to those involved in Iranian oil sales,” said Tom Keatinge, director at the Royal United Services Institute in London.
Why Are Sanctions Targeting Iran?
Iran’s economy relies heavily on oil revenues, which, according to the U.S. State Department, are used to fund “terrorist and proxy groups” in the region that oppose Israel and the U.S.
The new sanctions target individuals and companies across China, India, and the UAE, including Iranian and Indian citizens, crew management firms, and oil tankers.
“These sanctions will likely have an impact, though the extent remains unclear,” said Nader Itayim, a Middle East energy expert. “The real question is how far the Trump administration is willing to go in curbing Iran’s oil trade.”
The sanctions come after President Trump withdrew the U.S. from the 2015 nuclear deal, reimposing sanctions that initially reduced Iran’s oil exports to about 400,000 barrels per day. Over time, Iran increased exports through evasion tactics, including rising Chinese demand and less stringent enforcement under President Biden.
This new round of sanctions is part of Trump’s “maximum pressure” strategy, which he used during his first term. Trump argues that Iran is too close to developing nuclear weapons, though Tehran maintains its atomic program is peaceful.
“One of Trump’s goals is to bankrupt Iran,” said Keatinge. “Since his last presidency, there’s been more focus on targeting oil revenues and infrastructure, largely inspired by the approach used to address Russia’s own shadow fleet.”
How Does Iran’s ‘Shadow Fleet’ Operate?
Iran has created a “shadow fleet” of tankers to evade sanctions and secretly ship oil to China and other buyers. These tankers employ methods such as ship-to-ship transfers, using intermediaries, hiding financial transactions, and rebranding the oil to disguise its origin.
Despite sanctions, Iran has continued to move oil and generate revenue. In 2024 alone, the country exported 587 million barrels of oil, with 91% of that going to China, according to United Against Nuclear Iran.
While China officially stopped buying Iranian oil in 2022 to avoid U.S. sanctions, billions of dollars worth of Iranian oil have still made their way to China through the shadow fleet.
What’s Trump’s Next Move?
U.S. officials have urged China and other countries to avoid facilitating Iranian oil shipments. The latest sanctions focus on vessels and shipping companies involved in transporting Iranian oil.
Experts suggest that these measures are part of a broader strategy, one that has been shaped by targeting Russian oil shipments. They may expand to cover other parts of the shadow fleet, such as insurance companies, crew agencies, and the ports that receive these tankers.
Itayim from Argus Media believes that while these sanctions may discourage risk-averse Chinese buyers, they won’t stop Iranian oil from flowing. To curb exports further, he argues, the U.S. would need to apply pressure on Chinese ports, buyers, intermediaries, and even banks.
However, such actions could harm U.S.-China relations, especially with recent tensions over tariffs.
Keatinge believes the issue of Iranian oil could become part of broader discussions between Trump and Chinese President Xi Jinping. The sanctions, he says, offer a way to increase pressure on Iran without escalating tensions with Beijing.
“China is the key player when it comes to Iranian oil,” said Keatinge. “But does Trump want to risk a full sanctions war with Xi?”
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