How does China help Iran circumvent international sanctions?

Simply because Iranian oil is cheap and good.

Global oil prices are rising due to international conflicts, but Iran is keen to sell its penalties, providing a reduced price.

According to a report based on data from merchants and ship followers collected by Reuters in October 2023, China provided nearly $ 10 billion in the first nine months of 2023 through record purchases of oil from Iran, Russia and Venezuela, all of which are sold at low prices.

The global crude oil index fluctuates, but it is usually less than $ 90 a barrel.

Humayoun Falak Shahi, chief oil analyst in the data and analysis company Kepler, estimates that Iran is trading its raw oil with a deduction of $ 5 a barrel. Last year, this reduction reached $ 13 a barrel.

There are also influential geopolitical interests, according to Shahi’s astronomy.

He said: “Iran is part of a big game between the United States and China.”

He added that by supporting the Iranian economy, “China increases the geopolitical and military challenges facing the United States in the Middle East, especially with tensions with Israel.”

Analysts believe that Iran and China have developed over the years a sophisticated system for the circulation of Tehran oil -subject.

“The main elements of this commercial system are the Chinese” small, independent “refineries, the” dark fleet “tankers, and Chinese regional banks with limited international dealings.

And “tea jugs” in which Iranian oil is refined is small and semi -independent, and it is an alternative to state -owned large companies.

“It is an industrial language, because the refineries were initially like tea jugs, with very basic facilities, most of which are located in the Shandong region, southeast of Beijing,” said Shahi’s astronomer.

These small refineries are less risks to China compared to state -owned companies that operate internationally and need to deal with the American financial system.

“Small private refining firms that do not have operations abroad, and do not trade dollars, do not need foreign financing,” Falak Shahi told the Persian BBC.

Oil tankers can be tracked around the world’s oceans through a program that monitors its location, speed and path.

To avoid the tracking system, Iran and China use “a network of mystery with mysterious ownership, and not reported from accurate locations,” Nicoladzi said.

“They can overcome Western tankers, shipping services and brokerage services. In this way, they do not have to adhere to Western regulations, including sanctions,” she added.

Usually, the “dark fleet” ships disable the automatic definition system, which is a system of transmission and reception, to avoid its discovery, or deceive it and pretend to be in a specific place that is completely different from its real location.

These fleets are believed to carry out transport operations from one ship to another with Chinese recipients in international waters, outside the authorized transport areas, and sometimes in bad weather conditions to hide their activities, which makes it difficult to determine the source of oil.

Fak Shahi indicated that these transportation processes usually occur in the waters of Southeast Asia.

“There is the east of Singapore and Malaysia, which has always been a site that has always flowed a lot of tankers and transported their loads to each other.”

After that, the “brand change” stage comes.

In this way, as a Shahi astronomy explains, “a second ship of Malaysian waters sail to northeastern China and hand over crude oil. The goal again is to make crude oil seem as if it is not from Iran, but from Malaysia, for example.”

According to the US Energy Information Department, customs data indicate that China imported crude oil from Malaysia by more than 54 percent in 2023 compared to 2022.

In fact, the quantity that Malaysia has reported to export to China exceeds its total production capacity of crude oil, according to Nicholadzi, “which is why it is believed that what Malaysia has reported is actually exports of Iranian oil.”

Reports were reported that Malaysian and Indonesian officials detained Iranian carriers for “transporting unauthorized oil” last year in July and October.

Instead of the international financial system that the West is watching, Nicholadzi explains that transactions are carried out through smaller Chinese banks.

“China is well aware of the risks that accompany the purchase of Iranian oil -subject oil, and for this reason you don’t want to involve a great task banks in these transactions,” says China.

“Instead, you use small banks that do not already have international fame.”

It is also believed that Iranian oil payments are pushed into the Chinese currency to bypass the dollar -dominated financial system.

“This money is placed in accounts in Chinese banks that have links to the Iranian regime,” said Shahi’s astronomy. He added: “After that, these funds will be used to import Chinese goods, and it is clear that there is a great deal of these funds returned to Iran.”

“But it is not clear how this is done and whether Iran is able to restore all its money,” he added.

Some reports indicate that Iran uses “exchange houses” within its country to further obscure the financial track.

On April 24, US President Joe Biden signed an external aid package for Ukraine that included extensive sanctions on the Iranian oil sector.

The new law expands the penalties to include ports, ships and foreign refineries that deliberately treat or ship Iranian crude in violation of current US sanctions, and also expands the so -called secondary sanctions to include all transactions between Chinese financial institutions and Iranian banks subject to sanctions used to buy oil. And the products derived from oil.

Falak Shahi said that Washington may be reluctant to implement the sanctions completely.

“This is simply because the top priority for the Biden administration is the price of gasoline at home. This is more important even than its foreign policy,” Falk Shahi added.

Iran is the third largest producer in the Organization of Petroleum Exporting Countries (OPEC), and produces about three million barrels of oil per day, or about three percent of the total global production.

Experts say that the interruption of its supplies may cause global oil prices to rise.

“Biden knows that if the United States reduces its exports from Iran, this will mean a decrease in supply in the market, and the price of crude oil will enhance internationally. If this happens, this will lead to a high price of gasoline in the United States,” said Falak Shahi.

He added that this is something Biden might want to avoid it before the presidential elections.