Who is buying Iranian oil, and how will the Trump Secondary Tariff impact trade?

First, let’s look into who is buying and how much oil Iran is shipping.

In 2025, Iran’s oil exports, despite facing extensive U.S. sanctions, have continued to flow primarily to a limited set of buyers, with China dominating as the principal importer. Below is a detailed breakdown of the key buyers of Iranian oil, based on available data, including their methods of circumventing sanctions and the broader context of Iran’s oil trade. This response integrates relevant insights from prior queries, such as global oil demand and sanctions on Iran, to provide a comprehensive picture.

Primary Buyers of Iranian Oil in 2025

1. China:
   • Dominance: China is by far the largest buyer, purchasing 80–90% of Iran’s oil exports, which averaged 1.38–1.7 million barrels per day (b/d) in 2024 and early 2025. In March 2025, imports reportedly surged to a record 1.71–1.8 million b/d due to fears of tighter U.S. sanctions.
   • Key Importers:
     • Independent “Teapot” Refineries: Small, private refineries in Shandong province, such as Lawen Namu Petroleum Trading Co., Qingdao Kedama Energy Trading Co., Shandong Dongfang Hualong Industry & Trade Group, and Shangang Guomao, are the primary buyers. These refineries processed hundreds of millions of dollars’ worth of Iranian crude, with Lawen Namu identified as the top importer in February 2025.
     • Shandong Shengxing and China Oil and Petroleum Company Limited (COPC) were sanctioned in April 2025 for receiving Iranian oil shipments worth over $1 billion, with COPC allegedly acting as a front for Iran’s Islamic Revolutionary Guard Corps (IRGC).
     • Other notable teapots include Henan Fengli Petro-Chemical Co., Shandong Kenli Petrochemical Co., Qirun Group Co., and Dongying Lianhe Petrochemical Group (Fuhai Group), the latter reportedly collaborating with Turkey’s ASB Group for monthly deliveries of 4 million barrels.
   • Methods of Evasion:
     • Iranian oil is rebranded as originating from countries like Malaysia, Oman, Russia, or the UAE, often labeled as “Malaysian Blend,” “Urals,” or “Bitumen Blend” to evade detection.
     • A “dark fleet” or “ghost armada” of over 400 vessels facilitates shipments, using tactics like disabling transponders, ship-to-ship transfers (STS) off Malaysia or Singapore, and falsifying documentation.
     • Payments are often made in Chinese yuan to avoid U.S. financial systems, reducing exposure to sanctions.
   • Motivations: Iranian oil is attractive due to its $15–30 per barrel discount (e.g., Iranian Light trades at ~$13 below Brent), high quality, and China’s opposition to unilateral U.S. sanctions. Teapots, with limited exposure to global financial systems, face lower sanction risks.
   • Impact: China’s purchases, totaling over $140 billion since January 2021, are critical to Iran’s economy, funding its military and regional activities despite U.S. efforts to drive exports to zero.
2. Syria:
   • Role: Syria is a smaller but consistent buyer, receiving Iranian oil to support the Assad regime, an ally of Tehran. Exact volumes are not well-documented but are part of Iran’s 1.5 million b/d crude and condensate exports in 2024.
   • Methods: Shipments are facilitated through Iran’s shadow fleet, often via STS transfers in the Persian Gulf or Mediterranean, with oil rebranded to obscure origins.
   • Context: Iran’s oil exports to Syria are part of its geopolitical strategy, supporting Hezbollah and other proxies, funded by oil revenues.
3. Venezuela:
   • Role: Venezuela, also under U.S. sanctions, receives Iranian oil and condensate to blend with its heavy crude for export. Iran exported small volumes to Venezuela in 2023–2024, with shipments increasing in late 2022.
   • Methods: Iran supplies light oil and diluents for Venezuela’s refining, using the same shadow fleet tactics as for China. Transactions may involve barter arrangements, reducing reliance on cash.
   • Volumes: Specific 2025 figures are unavailable, but Venezuela’s imports are minor compared to China’s, likely in the tens of thousands of b/d.
4. United Arab Emirates (UAE):
   • Role: The UAE serves as a transshipment hub and minor buyer, with some Iranian oil processed or stored before re-export. Iran exported petroleum products to the UAE in 2023, with total product exports exceeding 1 million b/d.
   • Methods: Oil is moved through STS operations near UAE ports, often rebranded as UAE-origin crude or products.
   • Context: The UAE’s role is more logistical, facilitating Iran’s access to global markets, though direct purchases are limited.
5. Other Potential Buyers:
   • Turkey: Historically a buyer (e.g., 258,000 b/d in March 2019), Turkey has reduced imports due to U.S. sanctions but maintains some trade, potentially through intermediaries like ASB Group, which collaborates with Chinese teapots.
   • India: India imported 387,000 b/d in March 2019 but halted purchases after U.S. waivers ended in May 2019. Some reports suggest minor, covert imports in 2024–2025, but no confirmed data exists for 2025.
   • South Korea and Japan: Both countries stopped importing Iranian oil after 2019 sanctions, with no evidence of resumed purchases in 2025.
   • Greece: Previously imported 30% of its oil from Iran, but no recent data confirms ongoing purchases.
   • Sentiment on X: Posts suggest potential buyers like India or Turkey could re-emerge if sanctions ease, but China remains the dominant player, with over 90% of Iran’s exports.

Context and Challenges

• Sanctions Impact:
  • Iran faces thousands of U.S. sanctions, intensified under the Trump administration’s “maximum pressure” campaign in 2025, targeting buyers, vessels, and intermediaries. Recent actions (e.g., April 2025 sanctions on Shandong Shengxing and COPC) aim to curb exports to zero, but enforcement has been inconsistent.
  • Despite sanctions, Iran’s exports rose to 1.7 million b/d in May 2024, a 5-year high, driven by China’s demand and a growing dark fleet of 383–400 vessels.
  • The Stop Harboring Iranian Petroleum (SHIP) Act (April 2024) empowers the U.S. to sanction foreign ports, but its effectiveness depends on enforcement, which China largely ignores.
  • In January–February 2025, exports dropped 9–19% from Q4 2024 levels (to ~1.38 million b/d), reflecting market caution amid new sanctions, though China’s purchases remain robust.
• Economic Impact:
  • Iran’s oil revenues are critical, generating $12 billion in Q1 2024, up 34.8% year-on-year, but ~50% of revenue is lost to brokers, discounts ($15–30/b), and money-laundering costs ($10–15/b).
  • China’s purchases, worth $8.5 billion in Q1 2024, fund Iran’s military and proxies (e.g., Hamas, Houthis), prompting U.S. sanctions on entities like Sepehr Energy and vessels like OXIS and GIOIOSA.
• Global Oil Market Relevance:
  • Global oil demand in 2025 (~103.9 million b/d) supports Iran’s exports, as China’s demand for cheap crude outweighs sanction risks. Iran’s 1.6–1.8 million b/d exports contribute to a global surplus, with OPEC+ spare capacity (5–6 million b/d) able to offset potential losses if sanctions tighten.
  • BP’s Gulf of Mexico production (300,000–350,000 boe/d) and Qatar’s LNG tanker fleet (128 vessels) highlight non-OPEC+ and gas-focused supply chains, contrasting with Iran’s sanctioned oil trade, which relies on China’s teapots and shadow fleet. Qatar’s LNG exports face no sanctions, unlike Iran’s oil.
  • Hawaii’s energy mix (80% petroleum) underscores reliance on imported oil, but no direct link to Iranian oil exists due to U.S. sanctions and Hawaii’s U.S. market integration.
• Geopolitical Dynamics:
  • China’s defiance of U.S. sanctions, labeling trade with Iran as “legal,” complicates enforcement.
  • Posts on X suggest China could escalate (e.g., escorting Iranian shipments) if the U.S. attempts a naval blockade, though this is speculative and unconfirmed.
  • Iran’s exports compete with Russian crude, with Iranian oil displacing Russian supplies in China due to deeper discounts in 2023–2024.

Summary

• Main Buyer: China (80–90% of Iran’s exports, 1.38–1.8 million b/d), primarily through Shandong-based teapot refineries like Lawen Namu, Kedama, and Shengxing, using a dark fleet and rebranded oil.
• Secondary Buyers: Syria, Venezuela, and the UAE (minor volumes, transshipment), with possible small-scale purchases by Turkey or India via intermediaries.
• Non-Buyers: South Korea, Japan, and Greece have ceased imports since 2019.
• Sanctions Evasion: Rebranding, dark fleet (383–400 vessels), yuan payments, and STS transfers enable trade, though 50% of revenue is lost to intermediaries.
• Data Sources: U.S. Treasury, Kpler, Vortexa, United Against Nuclear Iran (UANI), Reuters, and posts on X confirm China’s dominance, with export estimates ranging from 1.38–1.8 million b/d in 2025.

We are facing a significant issue with the China negotiations. Suppose you think that China is not looking at their closed factories, and realizing that the United States is in a stronger position to wait them out. In that case, you impose the secondary sanctions of doing no business with the United States. Cutting off your biggest customer just so you can buy oil is going to cause a financial collapse in China that we have never seen before.

Buckle up, we are in for a wild ride, and that is the Crude Truth.

Source: The Crude Truth Substack