China’s independent refiners are sustaining Iranian oil exports, despite U.S. sanctions, highlighting the resilience of shadow trade channels. Refining margins have collapsed, forcing reassessment of Iranian oil purchases, while the U.S. blockade threatens supply disruptions mid-year. China prioritizes energy security, encouraging continued purchases of Iranian and Russian crude.
The US has issued a warning to financial institutions regarding transactions involving Chinese ‘teapot refineries’, citing the risk of exposure to Iranian oil even among non-sanctioned buyers. OFAC has already sanctioned several refineries and is intensifying due diligence on Chinese importers. China has criticized the US’s actions.