WSJ: China approves Iran's oil export from 2018 reserves despite US sanctions

Iran has initiated the export of oil stored in China, tapping into reserves placed there in 2018 to raise funds for supporting its allies in the Middle East.

Iran has recently taken approximately 3 million barrels of oil from its storage in China, which had been stored to avoid the effects of impending US sanctions on Iranian oil exports, Caliber.Az reports citing the Wall Street Journal (WSJ).

At the end of 2018, Iran had deposited at least 25 million barrels of oil at two Chinese ports — Dalian and Zhoushan — amid fears of fresh US sanctions that would hinder its ability to sell oil.

The recent movement of oil involved two vessels, Madestar and CH Billion. The Madestar left Dalian in early January carrying 2 million barrels, while the CH Billion remains at the port, with an estimated 700 million barrels onboard. Both ships have been intermittent in transmitting their geolocation data. The Madestar is reportedly headed toward South Korean waters to transfer some of its cargo to the CH Billion.

It remains unclear how much Tehran received for the oil, but sources cited by the WSJ indicated that the funds were directed to Iran’s Islamic Revolutionary Guard Corps (IRGC). If Iran were to sell the entire stockpile at current market prices, it could generate over $2 billion in revenue. However, it still owes China around $1 billion for the storage fees.

The report also detailed that Iran had previously requested permission from China to access this oil, but Beijing had initially refused. However, after further negotiations in late 2024, China granted approval for the sale of oil from these reserves.

While a Chinese Foreign Ministry spokesperson stated they were unaware of the specifics, they emphasized China’s cooperation with all countries, including Iran, under international law and reiterated opposition to the “abuse of illegal and unjustified unilateral sanctions” by the US. Iran’s government declined to comment on the matter.

Although China has not officially purchased oil from Iran since 2022, fearing US sanctions, United Against Nuclear Iran reported that Iran exported 587 million barrels of oil in 2024, with 91% of that volume going to China. Gregory Brew, a senior analyst at the Eurasia Group, highlighted that due to sanctions, much of the revenue from these oil exports remains locked overseas.

By Tamilla Hasanova