China's Strategic Maneuver: Iranian Oil Import Dynamics Amid Sanctions

China, the world's leading crude importer, primarily sources its oil from Iran. However, recent U.S. sanctions waivers could lead to competition and increased prices. In 2025, China bought over 80% of Iran's oil, mainly through independent refiners in Shandong. The geopolitical landscape and pricing strategies play crucial roles in this trade.

China, dominating global crude importation, heavily relies on oil imports from countries under Western sanctions, including Iran, Venezuela, and Russia. The recent U.S. sanctions waiver on Iranian oil presents China with both an opportunity and a challenge: intensified competition and potential price hikes.

In 2025, data from Kpler revealed that China purchased over 80% of Iran's oil exports. The oil, favored by independent refiners in Shandong, is notably cheaper, traded at an $8 to $10 discount compared to non-sanctioned oil sources. Amidst fluctuating global tensions, these refiners find Iranian crude an economically viable option.

Despite sanctions reinstated by the U.S. since 2018, China continues this trade, often labeling Iranian oil imports as originating from transshipment hubs like Malaysia and Indonesia. Beijing's stance remains firm against unilateral sanctions, maintaining its Iranian oil trade as legitimate in the face of international scrutiny.

(With inputs from agencies.)