For the past few decades, the United States and the international community have imposed sanctions on Iran with the aim of curbing Iran’s nuclear weapons program, combating international terrorism by Iran, as well as its regional aggression and human rights violations. Iran, having been sanctioned and isolated by the international community for decades, has relied on long-term support from China to breathe and grow.
Last month, following the airstrikes carried out by the United States and Israel against Iran, China only made superficial gestures towards Iran, expressing limited public support through verbal condemnation and calls for restraint. As the war continues, China’s long-standing support for Iran may become increasingly crucial.
According to a report titled “Overview of China-Iran Relations” released by the U.S.-China Economic and Security Review Commission on March 16th, The Wall Street Journal outlined the major support and current status of relations provided by China to Iran in recent years.
Iran possesses the world’s third-largest proven oil reserves and holds the largest natural gas field in the world (shared with Qatar). Despite sanctions limiting Iran’s infrastructure for liquefied natural gas (LNG) exports, Iran remains one of the world’s major oil-exporting countries with a total production capacity of 3.8 million barrels per day, exporting around 1.6 million barrels of crude oil daily.
The report indicates that China sources 22% of its oil from countries like Iran, Russia, and Venezuela, authoritarian or autocratic nations, making China the largest buyer of Iranian oil and importing 90% of Iran’s oil export volume at prices as low as $8-10 per barrel. In 2025, China imported nearly 1.4 million barrels of Iranian oil daily, accounting for about 12% of its total oil imports.
Even with the sale of Iranian oil to China at heavily discounted prices, Iran still generates billions of dollars in revenue annually (around $31.2 billion in 2025), constituting 45% of Iran’s government budget and serving as a major source of finance for Iran’s government budget and military activities, some of which are used to destabilize the entire Middle East region.
The report reveals that while China does not acknowledge the legitimacy of U.S. sanctions, it is concerned about openly purchasing Iranian oil and potentially facing sanctions, thus it navigates both sides by discreetly allowing small independent Chinese refineries, known as “teapot” refineries, to purchase Iranian oil, keeping state-owned oil giants at a distance. These smaller refineries have limited connections to the international financial market and are unlikely to be significantly impacted by potential U.S. sanctions.
To circumvent sanctions, China also engages in deceptive tactics to conceal the origin of Iranian oil, such as not formally declaring the import of Iranian oil at customs, but falsely claiming it originates from countries like Malaysia, Oman, and the UAE; utilizing outdated “shadow fleets” of tankers for transport, operating under foreign flags, shutting off AIS transponders, engaging in geographical deception, and conducting ship-to-ship transfers to disguise the origin.
The report points out that China’s oil imports heavily rely on maritime shipping, with over 63% of its oil demand coming from maritime imports, half of which is transported through the Strait of Hormuz. As of March 10th, 15 vessels have passed through the Strait of Hormuz, the majority of which are shadow fleets transporting Iranian oil, with some ships claiming to have Chinese crew onboard to prevent Iranian attacks.
The Stockholm International Peace Research Institute (SIPRI) mentioned that during the Iran-Iraq War in the 1980s, China was Iran’s major arms supplier, and shortly before joining the United Nations sanctions against Iran in 2007, China halted arms deals with Iran.
The non-profit organization Nuclear Threat Initiative, based in Washington, stated that in the 1980s, China assisted Iran in developing its nuclear program, aiding in the construction of Iran’s largest nuclear research complex, the Isfahan nuclear facility. China justified its support for Iran’s civilian nuclear program rights while opposing Iran’s development of nuclear weapons.
However, a report submitted to Congress by the U.S.-China Economic and Security Review Commission in November of last year indicated that although public sources did not directly show Chinese assistance to Iran’s nuclear weapons program, China had been consistently selling missile components to Iran and assisting in Iran’s circumvention of sanctions on dual-use items.
The “Overview of China-Iran Relations” report unveiled that Chinese companies remain essential suppliers of military equipment to Iran, such as engines used in Iran’s “Shaheed” drones, rocket fuel chemicals, and various weapon electronic components. In December of last year, the Pentagon noted that Chinese commercial satellite companies had commercial dealings with Iran’s Islamic Revolutionary Guard Corps.
The Wall Street Journal reported that two ships associated with a Chinese state-owned enterprise left Chinese ports last year, carrying materials capable of producing around 260 solid propellant missiles (sodium chlorate, a key precursor for solid propellant rocket fuel) totaling 1,000 tons, potentially for missile production in Iran. Midway through 2025, Iran ordered thousands of tons of missile fuel components from China.
Recent shipping data from MarineTraffic also revealed that a few days after the U.S. and Israel launched attacks on Iran, two vessels linked to Iran’s Islamic Republic of Iran Shipping Lines (IRISL) departed from Chinese ports, likely indicating that China was supplying missile fuel precursors to Iran through these vessels.
In recent years, China-Iran cooperation has shifted towards the sale of dual-use technology and the transfer of defense-related technology, including technology related to missile and drone development. Iranian drones, including those used by Iranian proxies in the region, were found to incorporate Chinese-made components such as sensors, voltage converters, and semiconductors.
Just days before the U.S. and Israel carried out airstrikes in February, an anonymous report stated that China was directly selling weaponry to Iran, including offensive drones and nearing completion of a deal for anti-ship cruise missiles. If confirmed, this suggests that China’s provision of military capabilities to Iran may become more overt.
The report mentions that China facilitates the provision of controlled dual-use technologies needed for Iran’s unmanned drones and weapons projects, helping Iran evade export controls through a network of transshipment companies and shell companies in Hong Kong, mainland China, and third-party countries. As of November 13, 2025, a total of 366 entities in mainland China and Hong Kong were blacklisted for involvement in Iran sanctions projects. Over the past eight years, over 100 entities in mainland China and Hong Kong have been blacklisted for assisting Iran in circumventing export controls.
The report highlights that Iran operates a complex and secretive shadow banking network facilitated by China, utilizing shell companies and small regional banks that use false addresses and invoices (often via Hong Kong) to facilitate payments. Iran then washes a significant portion of its petroleum export earnings, mostly in yuan, through China-controlled overseas bank accounts into the global financial system, converting in Hong Kong into other currencies or depositing in overseas bank accounts in financial hubs like Hong Kong, Dubai, and Singapore.
By importing Iranian oil in yuan, China enables Iran to use a portion of the funds to import Chinese goods and engage in swap-like systems; for instance, Chinese oil buyers transfer funds to Chinese state-owned enterprises for infrastructure development projects in Iran. Iran utilizes its oil revenue to finance the Islamic Revolutionary Guard Corps, Hezbollah, Hamas, the Palestinian Islamic Jihad, Houthi armed groups, and other Iranian terrorist proxies.
The U.S.-China Economic and Security Review Commission’s report from last year warned that China’s assistance to Iran in evading U.S. sanctions sustains Iran’s disruptive activities in the Middle East. By providing Iran with discounted oil, China colludes with Iran to undermine the U.S.-led global order. Faced with international sanctions and isolation, China, Iran, Russia, and North Korea are hedging against each other, gradually forming an informal “authoritarian axis.”
The report suggests that over the past few decades, China-Iran relations have evolved from limited cooperation to comprehensive collaboration across various fields such as economics, diplomacy, and security. In 2021, China and Iran signed a “Comprehensive Strategic Partnership Agreement,” covering economic, security, and technological cooperation for the next 25 years. Many of these collaborations directly contradict U.S. foreign policy and national security interests.
In an attempt to balance U.S. influence in the Middle East and weaken the U.S.-led global order, China vigorously supports Iran in building international relationships. The report reveals that in 2019, China, Iran, and Russia jointly held annual naval exercises for the first time. In 2023, Iran joined the Shanghai Cooperation Organization (SCO) led by China and Russia, followed by a joint anti-terrorism exercise with China, Russia, and other nations.
In 2023, China mediated the restoration of diplomatic relations between Iran and Saudi Arabia, but recent Iranian retaliatory attacks on other Middle Eastern countries have led to a breakdown in the fragile peace. In 2024, China and Russia lobbied for Iran to join the BRICS nations, but after the U.S. and Israel bombed Iran last year, the BRICS countries only expressed grave concerns, and following the attacks on Iran in late February, they have yet to declare a stance, reflecting a disunity among BRICS countries.
The report states that the total bilateral trade between China and Iran in 2025 amounted to $9.96 billion, excluding around $31.2 billion of undeclared crude oil exported by Iran to China in 2025. If included, this would constitute over 75% of the total bilateral trade volume.
As per the Comprehensive Strategic Partnership Agreement signed in 2021, China committed to investing $400 billion over the next 25 years, but due to sanctions, Chinese enterprises have shown reluctance, resulting in minimal actual investments. In October 2025, The Wall Street Journal reported that a secret agreement facilitated by the China Export & Credit Insurance Corporation (Sinosure) for petroleum infrastructure could secure an $8.4 billion investment.
The U.S.-China Economic and Security Review Commission suggests that Iran has long sought to deepen its strategic cooperation with China. However, China has been hesitant to provoke the U.S. and other Middle Eastern countries and has not made formal defense commitments to Iran, providing only diplomatic support and dual-use materials, making it unlikely to take significant actions to support Iran. In recent years, bilateral defense cooperation between China and Iran has remained very limited, with participation in some trilateral (China-Russia-Iran) and multilateral (including the SCO) joint exercises.
The Commission believes that while China-Iran relations continue to expand, this relationship is highly lopsided. Iran heavily relies on China for energy export revenues and diplomatic support, while China attempts to navigate a middle ground, avoiding upsetting its relations with Saudi Arabia and other Gulf nations. Following Iran’s recent attacks on Gulf nations, China has refrained from issuing a clear statement but has condemned Iran’s indiscriminate attacks on civilians and non-military targets.
The Commission argues that China avoids providing overt aid or direct military support to Iran, aligning with its strategy on issues concerning Russia and Venezuela.