Iran’s oil exports to China are facing growing pressure due to weaker Chinese demand, tighter U.S. sanctions, and a U.S. naval blockade, threatening one of Tehran’s most important sources of revenue.
Chinese independent refiners, known as teapots, have reduced purchases and lowered operating rates as profit margins deteriorate. As a result, Iranian crude shipments to China reportedly fell from 1.8 million barrels per day in February to around 160,000 barrels per day in May.
The situation has been worsened by the U.S. blockade, which has significantly restricted Iran’s ability to move oil through the Strait of Hormuz. Analysts describe this as the most serious challenge yet for the Iran–China oil trade because it combines both economic and physical barriers.
China currently has ample alternative oil supplies, including cheaper Russian crude, while high fuel inventories and lower refinery utilization have reduced the need for Iranian barrels. Recent U.S. sanctions on major Chinese refiners have also increased caution among buyers.
As a result, Iran has been forced to offer deeper discounts on its crude, while the impact is becoming visible at home, with oil production reportedly falling 19% last month and export revenues coming under increasing pressure.
