Despite Sanctions, Iran’s Oil Continues to Flow—China Remains the Biggest Buyer

Iran continues to sell large volumes of oil on the global market despite facing numerous international sanctions. The country’s largest customer is China, which purchases the vast majority of Iranian crude.

For China, buying Iranian oil without relying on the U.S. dollar offers clear advantages. During periods of strict American sanctions, Beijing explored alternative payment systems and currencies to continue purchasing oil from Tehran. Today, China is estimated to buy about 90 percent of Iran’s total oil exports.

In 2025, roughly 13–14 percent of the crude oil China imported by sea reportedly came from Iran. According to several reports cited by NDTV and Visual Capitalist, much of the payment for these shipments was made in China’s currency, the yuan, often through indirect financial channels.

The Role of Bank of Kunlun

Financial expert Saurabh Jain of Magnum Finvest Services told NDTV that a relatively little-known Chinese bank—Bank of Kunlun—plays a key role in facilitating these transactions.

The bank, which operates under a Chinese state-owned oil company, handles commercial transactions related to the China–Iran oil trade. Instead of using dollars, payments are settled in yuan. The bank also helps route the money in a way that allows the funds to circulate within China’s financial system.

Indirect Oil Trade

Officially, China cannot directly import Iranian oil due to international sanctions. To avoid scrutiny, shipments are sometimes relabeled as oil originating from other countries, such as Malaysia, before being transported to Chinese ports.

Because dollar-based transactions could easily attract attention from international regulators, payments are typically completed in yuan through Bank of Kunlun.

Since the money is paid in Chinese currency, Iran often spends it within China itself—buying machinery, electrical equipment, infrastructure materials, and other industrial goods. As a result, a large portion of the money China spends on Iranian oil ultimately returns to China’s own economy.

Iran’s Oil Revenue

According to Visual Capitalist, Iran earned about $35.76 billion from oil exports in 2024. This revenue was not driven purely by market demand; geopolitical factors also played a major role.

Although many countries reduced or stopped purchasing Iranian oil due to sanctions, China continued its imports. As a result, more than 90 percent of Iran’s oil exports went to China, worth around $32.5 billion. This dependence has effectively made China Iran’s most important energy partner.

Other Buyers

Outside of China, Iran has very few major customers. Syria is the only country that purchased more than $1 billion worth of Iranian oil, accounting for roughly 3.3 percent of total exports.

Other smaller buyers include the United Arab Emirates and Venezuela, which account for approximately 2 percent and 1.2 percent of Iran’s exports respectively.

Iran Selling Oil at a Discount

In the past, Iran exported oil to many countries, including China, Japan, India, South Korea, and several European nations. However, international sanctions have significantly reduced the number of buyers.

Today, Iran often relies on what analysts call a “shadow fleet”—re-registered tankers and ship-to-ship oil transfers that help conceal the origin of shipments.

Pricing is another key factor. Iranian crude oil is usually sold at a discount of $3 to $9 per barrel compared to the global benchmark Brent crude. While Iran’s production costs are relatively low, these discounts mean the country sacrifices billions of dollars each year in potential revenue.

In effect, Iran offers cheaper oil to maintain its limited group of buyers in the face of ongoing international sanctions.