China Caught in the Middle as US Targets Iran Oil Trade

China has become increasingly entangled in Iran's oil trade, with Beijing buying over 80% of Iran's shipped oil, according to data from analytics firm Kpler. The US is set to impose new sanctions on Iran, which could put China at the center of a diplomatic standoff.

The US Treasury Secretary has warned that Washington will impose 'the toughest sanctions in history' on Iran and has urged Beijing to cooperate. Chinese imports of Iranian oil fell to 785,000 barrels per day in June, their lowest level since February 2023, according to Kpler data.

As a result of the tightening supply, Chinese refiners are looking for alternative crude supplies from Brazil and Iraq. 'Given the thin Iranian availability amid the US blockade, Chinese teapots are now looking beyond Russia and Iran,' said Sun Jianan, senior oil analyst at Energy Aspects.