The cheap crude oil flow from Iran to China might be cut off as the war continues.
As the Israel–Iran war intensifies, China’s reliance on cheap oil from Iran and its $400 billion deal with the Islamic regime may be in jeopardy.
If the Iranian regime is toppled, analysts say, the Chinese communist regime will not only face an economic blow, but its global expansion strategy to use the Middle East as a frontier to contain the West will be thwarted.
Currently, more than 90 percent of Iran’s oil exports flow to China, the world’s largest oil importer, according to Kpler, an international trade data provider.
Iran’s crude oil exports have been sanctioned by the international community because of concerns about Iran developing nuclear weapons. Many small refineries in China have been buying illicit Iranian oil en masse at a cheaper price than the standard market price.
Due to the sanctions, Iran has almost no other buyers apart from China, so it is at a disadvantage in pricing. In 2024, a senior official from the Iran Chamber of Commerce called the China–Iran trade relationship a “nineteenth-century colonial trap,” saying that China also “dictates how payments are made.”
Iran’s crude oil is paid for in Chinese RMB instead of U.S. dollars, and Iran has to buy a large amount of Chinese goods, which further exacerbates its economic dependence on China.
Israel has bombed some Iranian oil facilities in recent days but hasn’t cut off its oil exports. If that happens, China’s many small refineries will need to buy oil elsewhere at market prices for the first time in years.
The Israel–Iran war would have a huge impact on China’s oil supply, Zheng Qinmo, director of the Department of Diplomacy and International Relations at Tamkang University in Taiwan, told The Epoch Times on June 18.
“China has a large investment in Iran, and Iran owes China a lot of money. Half of Iran’s oil is exported to China to repay debts, and the other half is sold at a very low price. So Iran has become a country that the CCP can control in the Middle East,” Zheng said.
By Alex Wu
