U.S. Sanctions Pressure Chinese Teapots Buying Iranian Oil

The administration of Donald Trump has imposed new sanctions and penalties on Chinese independent refiners, known as teapots, to curb the purchase of Iranian crude oil. These refiners, primarily located in Shandong province, bought over 80% of Iran's shipped crude in 2025, averaging 1.38 million barrels per day by utilizing discounts of $8 to $10 per barrel below ICE Brent.

Trade has become scarce since February 28, following U.S.-Israeli strikes on Iran. The pressure on Beijing is further intensified by a 30-day U.S. sanctions waiver on Iranian oil, which is expected to increase global competition and raise prices for Chinese buyers.

While the Government of China defends its trade with Iran as legitimate and rejects unilateral sanctions, official customs data has not recorded oil shipments from Iran since July 2022. To bypass restrictions, shipments are frequently mislabeled as originating from Indonesia or Malaysia.