China has helped Iran blunt the impact of U.S. sanctions over the past five years by buying the bulk of its oil exports and supporting a complex financial and shipping network that has allowed Tehran to keep earning billions of dollars in revenue, according to The Wall Street Journal.

Chinese buyers, private refiners, smaller banks, and a web of front companies have together formed one of the world’s largest sanctions-evasion networks, enabling Iran to keep selling crude oil even after Washington’s “maximum pressure” campaign sought to choke off the country’s main source of income. The revenue has helped Tehran finance its military activities and sustain its economy despite years of tightening restrictions, the report said. 

According to the Journal, China bought roughly 1.4 million barrels per day of Iranian oil in 2025, citing estimates from tanker-tracking firm Kpler. That amounted to more than 80 percent of Iran’s oil sales last year and marked a sharp increase from the roughly 650,000 barrels per day China imported in 2017, before the first Trump administration escalated sanctions. Official Chinese customs data has not reported crude imports from Iran since 2023, a gap that is intended to reduce political friction with Washington.

Iran adapted to sanctions by building clandestine export channels after its oil sales fell from nearly 2.8 million barrels a day in May 2018 to about 200,000 in August 2019. Iranian-linked firms allegedly used false paperwork, mislabeled cargoes, and ship-to-ship transfers to disguise the origin of crude, while operators in the Middle East, China and elsewhere used a growing shadow fleet to move oil to Chinese ports, the WSJ said. 

One China-based tanker network established in 2019 now includes at least 56 vessels and has transported more than 400 million barrels of sanctioned oil, according to research cited by the Journal. 

Inside China, the main buyers have shifted from large state-owned energy companies to smaller independent refiners known as “teapots,” which the Journal said are less vulnerable to U.S. sanctions because of their more limited international exposure and their use of yuan-denominated transactions. The newspaper also reported that Beijing steadily expanded import quotas for non-state traders, increasing the sector’s capacity to absorb Iranian crude at discounted prices. 

Payments have also been rerouted through smaller Chinese financial institutions with limited global operations, making them harder for Washington to pressure, the Journal said. 

American officials have cited the Bank of Kunlun—a small institution that launched in a desert city near the border of Kazakhstan before its takeover in 2009 by Chinese oil company CNPC—as a key conduit in transfers to Iranian banks. The U.S. Treasury Department blacklisted Kunlun in 2012 for allegedly providing hundreds of millions of dollars in services to Iranian banks, including paying letters of credit and facilitating funds transfers, the newspaper said. 

Read more at The Wall Street Journal