The latest round of US sanctions on Iran targets Chinese “teapot” refineries—small, privately owned oil facilities. This move marks a further escalation in Washington’s efforts to increase economic pressure on Tehran, with potential effects on global geopolitics, the economy, and energy markets.
Although the US has not yet reached a “maximum pressure” strategy that would reduce Iranian oil exports from 1.5 million barrels per day (bpd) to near zero, Washington is intensifying efforts to bring Tehran back to negotiations over its nuclear program. However, increasing pressure could lead to higher oil prices, which contradicts President Donald Trump’s goal of lowering energy costs to fight inflation, a promise he made during his January inauguration.
Rystad Energy’s data shows that almost all of Iran’s crude exports are directed to China. To effectively implement maximum pressure, the US would need China’s cooperation to reduce or stop buying Iranian oil. This marks the fourth round of sanctions, with each wave tightening the economic noose around Tehran. In a related move, the US recently revoked a waiver that allowed Iraq to buy electricity from Iran, further limiting Tehran’s revenue.
The effectiveness of these sanctions in forcing Iran to negotiate remains uncertain. Rystad Energy’s analysis suggests that if Tehran remains unresponsive, the US may introduce even stricter measures. President Trump has repeatedly urged Iran to return to talks, signaling his desire for a new nuclear agreement. While the immediate impact of these sanctions may be limited, they send a clear message about the US administration’s intention to increase pressure on Iran.
Meanwhile, OPEC+ has decided to raise oil production, which could influence the US’s approach to tightening sanctions on Iran. The recent drop in oil prices, partly due to the OPEC+ production increase, may provide the US with a more favorable environment to impose stricter sanctions on Tehran.
With oil prices around $70 per barrel, the current market conditions offer the US a strategic advantage. OPEC+ may be increasing production in anticipation of potential US sanctions, helping to counter the loss of up to 1.5 million bpd of Iranian exports without destabilizing global oil prices.
Jorge León, Head of Geopolitical Analysis at Rystad Energy, noted that Iranian crude exports surged in January to nearly 1.5 million bpd—the highest level since May 2024 and the second highest since March 2019. This increase could indicate that Tehran is bracing for more US pressure.
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