World
China Buys 90% Of Iran’s Oil But Still Won’t Be Its Ally
— 3 mins read
Beijing takes discounted crude worth tens of billions a year, supplies drone parts, and still refuses to sign anything that looks like an alliance
China buys up to 91% of Iran's oil exports, taking more than 1 million barrels a day despite American sanctions. The trade keeps Tehran's government funded and hands Beijing cheap fuel, but China has been careful to give Iran nothing that would drag it into a war.
The oil lifeline that beats sanctions
China is Iran's largest trading partner by a wide margin, and the oil trade dwarfs everything else. Shipping data analysed by Visual Capitalist and energy trackers Kpler and Vortexa shows Iranian exports to China running at roughly 1.3 to 1.5 million barrels a day through 2024 and 2025.
Those sales generate the bulk of Iran's foreign earnings and are its main workaround for international sanctions. The cargoes move on a shadow fleet of tankers that switch flags, transfer oil at sea, and turn off their tracking systems before docking at smaller Chinese refineries.
Beijing does not pay full price. Iranian crude typically trades at $8 to $12 a barrel below the benchmark. Iran has effectively one customer, and when you have one customer, the customer sets the price.
A 25-year deal that exists mostly on paper
The formal framework is a 25-year cooperation agreement signed in Tehran on 27 March 2021, covering energy, infrastructure, and technology.
Five years on, implementation has been slow and limited. Many of the headline projects, worth hundreds of billions in potential investment, remain aspirational. Sanctions risk, Iran's economic troubles, and caution from Chinese firms have kept most of the money on paper.
Drone parts keep flowing
Beijing's support goes beyond buying oil. The Wall Street Journal has reported that Chinese suppliers continue to feed drone factories in Iran despite US sanctions. Engines, electronics, sensors, and semiconductors of Chinese origin have been documented in Iranian drones and missiles, according to a fact sheet from the US-China Economic and Security Review Commission, a body funded by the US Congress.
Shipments continued into 2025 and 2026, even as Washington tightened enforcement.
Exercises, yes. Alliance, no
China, Iran, and Russia have held joint naval drills in the Gulf of Oman, including the annual Maritime Security Belt exercise reported by Al Jazeera in March 2025. China backed Iran's entry into the Shanghai Cooperation Organisation in 2023 and BRICS in January 2024, and it brokered the 2023 restoration of ties between Iran and Saudi Arabia.
Iran has effectively one customer, and when you have one customer, the customer sets the price.
But there is no defence treaty and no alliance. Beijing is hedging. Its two-way trade with Saudi Arabia and the United Arab Emirates was reported at around $108 billion each in 2025, more than its official trade with Iran. China wants stable oil from the whole Gulf, not a partnership with one side of it.
The United States sits in a different position. It has been a net energy exporter since 2019 and keeps security partnerships with Gulf states and Israel. China, the world's largest oil importer, depends on tankers passing through the Strait of Hormuz. Any disruption there hits Beijing directly, which is why it avoids anything that risks a wider confrontation.
US sanctions designations in 2025 and 2026 targeted Chinese buyers, terminals, and shipping networks, cutting flows temporarily and forcing Tehran into deeper discounts.
