Iran Sells Its Oil Stored in China to Finance Operations in the Middle East

Patrol vessel KN. Pulau Marore-322, owned by Indonesia's Maritime Security Agency (Bakamla) patrols to inspect the Iranian-flagged Very Large Crude Carrier (VLCC), MT Arman 114, and the Cameroon-flagged MT S Tinos (Reuters)
Patrol vessel KN. Pulau Marore-322, owned by Indonesia's Maritime Security Agency (Bakamla) patrols to inspect the Iranian-flagged Very Large Crude Carrier (VLCC), MT Arman 114, and the Cameroon-flagged MT S Tinos (Reuters)
TT
20

Iran Sells Its Oil Stored in China to Finance Operations in the Middle East

Patrol vessel KN. Pulau Marore-322, owned by Indonesia's Maritime Security Agency (Bakamla) patrols to inspect the Iranian-flagged Very Large Crude Carrier (VLCC), MT Arman 114, and the Cameroon-flagged MT S Tinos (Reuters)
Patrol vessel KN. Pulau Marore-322, owned by Indonesia's Maritime Security Agency (Bakamla) patrols to inspect the Iranian-flagged Very Large Crude Carrier (VLCC), MT Arman 114, and the Cameroon-flagged MT S Tinos (Reuters)

Iran has shipped nearly 3 million barrels of oil from a storage site in China in a bid to raise funds that could be used to shore up Iran’s allied militia groups in the Middle East, people familiar with the matter told The Wall Street Journal last week.
The oil was taken from a stockpile of at least 25 million barrels that Iran had sent to China in late 2018.
China approved Iran's oil exports after talks with Iranian officials in late November and December 2024, sources told the newspaper.
The additional oil revenue comes at a crucial time for Iran, as it tries to support its allied militias in the region, such as Hezbollah, which have been battered in conflicts with Israel.
The fall of the Assad regime came as another blow, choking off the land route that Iran used to supply Hezbollah with cash and weapons, WSJ said.
The newspaper warned that the IRGC has taken charge of unloading and claiming this oil. There are concerns that the proceeds from its sale may be transferred to Iran’s regional proxy force, it noted.
US officials specifically raised concerns about the money flowing to the IRGC in its contacts with Beijing, one of the people told the newspaper.
A representative of the Chinese Foreign Ministry said that the ministry is not aware of this situation, but Beijing cooperates with all countries, including Iran, within the bounds of international law.
China has opposed the US “abuse of illegal and unreasonable unilateral sanctions” against Iran, the spokesperson said.
China's decision to allow Iran to ship the oil could stoke tensions with Washington, as President-elect Donald Trump prepares to take office. In his first term, Trump moved aggressively to curtail Iranian oil sales.
Trump’s transition team has said he would return to his maximum pressure campaign once he takes office on Jan. 20. China, as the largest buyer of Iranian oil, could be critical to that effort.
Trump might have to decide what he wants to give priority to in his relationship with Beijing, given his demands on trade and other issues.
The oil that Iran stored in China in 2018 has been at two ports—in Dalian, east of Beijing, and Zhoushan, south of Shanghai, the people said. Two vessels—the Madestar and CH Billion—recently set sail for Dalian, people told WSJ.
Madestar left the Dalian port in early January loaded with 2 million barrels of oil, and the CH Billion is believed to be still docked there, set to be loaded with 700,000 barrels, they said.
The US Treasury Department sanctioned 35 entities and vessels on Dec. 3 that it said played a role in transporting illicit Iranian petroleum to foreign markets.
Then on December 19, the Treasury imposed additional sanctions on entities and vessels, including a China-based company, to stem the flow of revenue that the Iranian regime uses to support terrorism abroad, as well as to oppress its own people.
In 2024, Iran exported 587 million barrels of oil. China imports accounted for 91% of Iran's total exports, the WSJ said. But much of the funds from those sales have remained abroad because of the impact of US financial sanctions on Tehran.
Even if Iran is ultimately able to sell all the oil now stored in China, it is unclear exactly how much money it would make.
Sanctions and the refusal of some ships to transport the oil will increase the cost of the sale and slow it down.

 

 



Putin and Iranian President Sign Strategic Cooperation Treaty

Russian President Vladimir Putin and Iranian President Masoud Pezeshkian attend a documents signing ceremony in Moscow, Russia January 17, 2025. (Reuters)
Russian President Vladimir Putin and Iranian President Masoud Pezeshkian attend a documents signing ceremony in Moscow, Russia January 17, 2025. (Reuters)
TT
20

Putin and Iranian President Sign Strategic Cooperation Treaty

Russian President Vladimir Putin and Iranian President Masoud Pezeshkian attend a documents signing ceremony in Moscow, Russia January 17, 2025. (Reuters)
Russian President Vladimir Putin and Iranian President Masoud Pezeshkian attend a documents signing ceremony in Moscow, Russia January 17, 2025. (Reuters)

Russian President Vladimir Putin and his Iranian counterpart Masoud Pezeshkian on Friday signed a 20-year strategic partnership treaty involving closer defense cooperation that is likely to worry the West.

Pezeshkian, on his first Kremlin visit since winning the presidency last July, hailed the signing as an important new chapter in the two countries' relations, while Putin said Moscow and Tehran had many of the same views on international affairs.

"This (treaty) creates better conditions for bilateral cooperation in all areas," said Putin, emphasizing the upside for economic ties and trade, which he said was mostly carried out in the two countries' own currencies.

"We need less bureaucracy and more concrete action. Whatever difficulties are created by others we will be able to overcome them and move forward," Putin added, referring to Western sanctions on both countries.

Putin said Russia regularly informed Iran about what was going on in the Ukraine conflict and that they closely consulted on events in the Middle East and South Caucasus region.

Russia and Iran were the main military allies of Syrian President Bashar al-Assad, who fled to Moscow after being toppled last month. The West also accuses Iran of providing missiles and drones for Russian attacks on Ukraine. Moscow and Tehran say their increasingly close ties are not directed against other countries.

Putin said work on a potential gas pipeline to carry Russian gas to Iran was progressing despite difficulties, and that, despite delays in building new nuclear reactors for Iran, Moscow was open to potentially taking on more nuclear projects.

Pezeshkian, whose words were translated by Russian state TV, said the treaty would create good opportunities and showed Moscow and Iran did not need to heed the opinion of what he called "countries over the ocean".

"The agreements we reached today are another stimulus when it comes to the creation of a multi-polar world," he said.

CLOSE COOPERATION

Moscow has cultivated closer ties with Iran and other countries hostile towards the US, such as North Korea, since the start of the Ukraine war, and already has strategic pacts with Pyongyang and close ally Belarus, as well as a partnership agreement with China.

Immediate details of the 20-year Russia-Iran agreement were not available but it was not expected to include a mutual defense clause of the kind sealed with Minsk and Pyongyang. It is still likely to concern the West, however, which sees both countries as malign influences on the world stage.

Neither leader mentioned defense cooperation during their Kremlin press conference, but officials from both countries had said earlier that part of the pact focused on defense.

Russia has made extensive use of Iranian drones during the war in Ukraine and the United States accused Tehran in September of delivering close-range ballistic missiles to Russia for use against Ukraine.

Tehran denies supplying drones or missiles. The Kremlin has declined to confirm it has received Iranian missiles, but has acknowledged that its cooperation with Iran includes "the most sensitive areas".

Russia has supplied Iran with S-300 air defense missile systems in the past and there have been reports in Iranian media of potential interest in buying more advanced systems such as the S-400 and of acquiring advanced Russian fighter jets.

Pezeshkian's visit to Moscow comes at a time when Iran's influence across the Middle East is in retreat with the fall of Assad in Syria and the Israeli pounding of Iran-backed groups Hezbollah in Lebanon and Hamas in the Gaza Strip.

The fate of two major Russian military facilities in Syria has been uncertain since the fall of Assad.