China has effectively become the dominant buyer of Iranian oil, using a covert global network to funnel tens of billions of dollars into Tehran and blunt the impact of American sanctions, according to a report published Tuesday in The Wall Street Journal. The financial lifeline has allowed Iran to sustain its economy and continue funding military activities despite international restrictions.

The data reflects a sharp reversal from previous years. During President Donald Trump’s first administration, a “maximum pressure” campaign was launched to cut off Iran’s primary revenue stream. That effort drove oil exports down dramatically, from 2.8 million barrels per day in May 2018 to roughly 200,000 barrels per day by August 2019. Today, however, the trend has shifted, with Iran once again generating billions of dollars each month due to increased Chinese purchases.

According to the report, China now absorbs nearly all of Iran’s oil output, compared to just about 30 percent a decade ago. Figures from the research firm Kpler indicate that in 2025, China imported approximately 1.4 million barrels per day—double the amount it bought in 2017 and more than 80 percent of Iran’s total oil sales that year.

U.S. officials describe the system enabling this trade as one of the largest sanctions-evasion networks in the world. The operation relies on multiple layers of concealment, including private refineries, hidden payment channels, and shell companies—many based in Hong Kong—used to launder money and convert profits into foreign currency.

A so-called “shadow fleet” of tankers plays a central role in the scheme. These vessels reportedly engage in tactics such as renaming ships, disabling tracking transponders, and conducting ship-to-ship transfers at sea. The shipments are often accompanied by falsified documents that list the oil as originating from countries such as Oman or Malaysia.

The report notes that while China officially opposes what it calls “unilateral and unreasonable” sanctions, it has also been careful not to provoke Washington excessively. Still, Iranian oil remains attractive to Beijing due to its discounted price and its usefulness in countering U.S. objectives in the Middle East.

At the same time, Washington’s ability to respond remains limited. Although the United States has pursued indictments and expanded sanctions, taking aggressive action against Chinese financial institutions or refineries could drive up global oil prices and further strain relations between the two countries. Meanwhile, even as Iran effectively restricts Western shipping through the Strait of Hormuz, its own tankers continue to reach Chinese ports without disruption, helping to secure the regime’s economic survival.