Iran ships oil from China to support Middle East militias

Iran has exported approximately three million barrels of oil from storage in China to raise funds to support Tehran’s militia allies in the Middle East. 

The oil comes from a stockpile of at least 25 million barrels that Iran sent to China in 2018, anticipating new sanctions from the Trump administration at the time, Caliber.Az reports per foreign media.

The oil has been kept at ports in Dalian and Zhoushan, with two ships recently departing for Dalian. Beijing authorized the shipments in December following talks with Iranian officials in November and December.

While Tehran had previously attempted to sell this oil, this marks the first time China has given its approval. One of the vessels, the Madestar, left Dalian earlier this month carrying 2 million barrels of oil, while the other, the CH Billion, is believed to still be docked in Dalian, loaded with 700,000 barrels. 

The Madestar temporarily stopped transmitting its location and planned route via the AIS international signal system for three days earlier this month while offshore Dalian, before heading to the port. It later moved to waters off South Korea to transfer oil to another ship. The CH Billion briefly transmitted its position during this time. Iran could potentially earn up to $1 billion from selling the entire stockpile of oil, although it owes China about $1 billion in storage fees. 

Tehran intends to direct the proceeds from the oil sales to the Islamic Revolutionary Guard Corps (IRGC), which supports militia groups aligned with Tehran across the Middle East. The US has expressed concerns to China about funds potentially reaching the IRGC through these transactions. 

Iran set high oil prices for Chinese buyers, which created a barrier to trade between the two countries. 

The US imposed sanctions on Iran in 2018 after withdrawing from the nuclear deal. The restrictions included a ban on oil exports. Initially, the US granted temporary waivers to several major importers, including China, allowing them to continue purchasing oil from Iran.

By Naila Huseynova