Tuesday, June 24, 2025

How do US sanctions and Trump's policy impact Iran's oil trade?

US sanctions have significantly impacted Iran's oil trade, with China emerging as the primary buyer, providing a crucial lifeline to Tehran's economy.

Here's how US sanctions and Trump's policy impact Iran's oil trade

General Impact of Sanctions: Iran's economy has been battered by crippling international sanctions, which have targeted its trade1. The United States has previously imposed sanctions to punish the trade of Iranian oil1. For instance, last month, the United States announced fresh sanctions on Iranian oil sales to Beijing2. These actions are part of Trump's administration's "maximum pressure" campaign against Tehran2.

China's Role as a Buyer:

◦China serves as the main buyer of Iranian oil1.

◦It buys more than 90% of Iran's oil exports2.

◦In April, China imported 1.3 million barrels of Iranian crude oil per day, although this was a decrease from a five-month high in March2.

Trump's Policy Shift (June 2025):

◦On Tuesday, June 24, 2025, U.S. President Donald Trump stated that China can continue to buy Iranian oil1.

◦This statement appeared to be a relief for Tehran from previous sanctions Washington had imposed1.

◦Trump posted on Truth Social, "China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the U.S., also"1.

Broader Regional Context: While not directly about oil trade impact, it's notable that China has condemned recent US bombing strikes on Iran's nuclear facilities and called for de-escalation in the region, particularly involving Israel2. However, analysts suggest that the fighting between Israel and Iran has severely reduced Beijing's regional leverage.

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