Iran Uses Barter System with China to Bypass US Sanctions
Iran has found an unconventional way to bypass US sanctions on its oil sales by using a barter-like arrangement with China. According to senior Iranian sources and three other people familiar with the matter, Tehran has been exchanging its oil for credits that can be used to import goods from China, including military gear.
The mechanism, which has provided a financial lifeline for Iran in recent years, allows Chinese companies to retain access to discounted Iranian oil while shielding banks and entities that export to Iran from international scrutiny or penalties. The US has imposed sanctions on some smaller Chinese entities involved in the trade, but has stopped short of more severe measures.
The barter-like arrangement has enabled Iran to purchase billions of dollars' worth of goods from China, including medicines, vehicles, and communication equipment. In one instance, the mechanism was used for contracts to supply Iran with air defense equipment worth millions of dollars.