The United States has imposed sanctions on a network of people and companies accused of facilitating the sale of millions of barrels of Iranian oil to China, as the administration of US President Donald Trump seeks to bring Iran's crude oil exports to zero.
The new round of sanctions is a warning to Beijing and Tehran, designed to put China on notice, but without distracting from behind-the-scenes discussions about the possibility of a deal with Iran that would limit its nuclear program.
Analysts said the sanctions — which have targeted individuals and ships linked to the so-called shadow fleet of ships transporting Iranian oil under the embargo — may be effective, but they will not reduce Iran's oil exports to zero. Stronger measures are needed to achieve that — for example, targeting Chinese institutions, such as banks that process oil transactions — but that could risk escalating tensions between the world's two largest economies.
“This is a small thing, but it’s not because Trump necessarily wants to handle this issue carefully,” said Tom Keatinge, director of the Center for Financial Crime and Security Studies at the Royal Institute of Technology in London. “This is a way to send a message and let everyone involved in transporting Iranian oil know.”
Why is Trump hitting Iran?
Iran's economy is heavily dependent on oil revenues, which, as the US State Department said on February 6, are used to finance "terrorist groups and networks of proxies," referring to Iran's regional network of armed groups that oppose Israel and the US.
The new sanctions have targeted dozens of companies and individuals in China, India and the United Arab Emirates, including Iranian and Indian citizens, company leaders, and several tankers.
“These sanctions, and the new sanctions that will certainly follow, will have an impact,” said Nader Itayim, a Middle East energy expert at Argus Media, based in the United Kingdom. “The question is how big that impact could be. That will depend on how serious the Trump administration is about targeting the Iranian oil trade.”
Under the 2015 nuclear deal, US sanctions were lifted, allowing Iran to sell oil. Trump withdrew from the deal in 2018 and reimposed sanctions that reduced exports to about 400,000 barrels per day.
Iranian authorities insist that it makes no difference to them who the US president is.
Later, Iran increased exports by evading sanctions, boosting Chinese demand, and taking advantage of the more lenient enforcement of sanctions during the administration of former President Joe Biden.
The new sanctions are part of the Trump administration's return to the "maximum pressure" campaign that characterized Trump's policy toward Iran during his first term as president. Trump says Iran is "very close" to developing a nuclear bomb, but Tehran has long insisted its nuclear program is peaceful.
“One of his goals now is to bankrupt Iran,” Keatinge said. “Since Trump was last president, the sanctions community — public and private — has learned a lot about how to target a country’s oil revenues and hit other infrastructure with measures, and that lesson has been learned largely from the experience with Russia’s shadow fleet.”
As part of its effort to evade sanctions on its oil exports and finance its war against Ukraine, Russia has employed a shadowy fleet of hundreds of aging ships, largely registered outside Western jurisdictions, to export most of its oil to markets.
How does the "shadow fleet" operate?
Iran's "shadow fleet" of tankers has been essential to Tehran's ability to evade sanctions and secretly transport oil to China and other countries.
This strategy includes ship-to-ship shipments, through intermediaries, hidden financial transactions, and rebranding the oil, hiding its Iranian origin and making it appear to come from another country.
These methods have allowed Iran to continue oil shipments and generate revenue despite sanctions.
According to the slogan "United Against Nuclear Iran," a nonprofit group that campaigns against the threats it says Tehran poses, 587 million barrels of oil were exported from Iran in 2024, and 91 percent of those exports went to China.
China has long been the largest buyer of Iranian oil, but since 2022 it has officially stopped buying oil to avoid US sanctions, according to data from research firm Kpler.
Despite officially saying it no longer buys oil, billions of dollars of sanctioned Iranian oil could be found heading to China, due to the shadowy fleet network used by Iran.
What is Trump's next move?
US officials aim to stop Iran from exporting oil by pressuring China and other countries not to participate and by imposing sanctions on ships believed to be helping transport the oil.
The latest round of sanctions has targeted ships and shipping companies believed to have transported Iranian oil, and Keatinge, an expert on exports, said it reflects a plan developed in recent years, as the US and its allies have targeted ships carrying Russian oil.
He said these measures could be expanded beyond targeting just oil-carrying ships and sanction other aspects of the shadow fleet infrastructure, such as the companies that provide the ships, the agencies that recruit crew, the ports that receive the ships, and by conducting a broader diplomatic campaign to pressure the states that register these ships.
Argus Media's Itayim believes such moves would likely scare off "Chinese buyers" but would have limited impact on reducing Iranian oil shipments. Further reductions in Iranian oil exports, he said, would require more pressure on Chinese ports and on buyers and brokers, including banks in China.
This could have knock-on effects on Washington's relations with Beijing and increase tensions, which were recently heightened with a new round of reciprocal tariffs on February 4.
Keatinge said that restricting Iranian oil could be part of a broader conversation between Trump and Chinese President Xi Jinping, and that the latest sanctions offer a way to increase pressure on Tehran without fueling further tensions with Beijing.
"China is the big problem that needs to be solved if you're going to hit Iranian oil," he said, "but does Trump want a sanctions war with Xi?"/ VOA (A2 Televizion)
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