By Rania Kisar, ACLS July 28, 2024
The oil trade between China, India, and Iran has undergone significant transformation, heavily influenced by changes in U.S. foreign policy from the Trump to the Biden administrations. This analysis explores the management of these trade activities during the Trump era and their expansion over the past four years. The study reveals a substantial increase in Sino-Iranian oil trade, driven by geopolitical strategies and shifts in U.S. policy.
Chinese Refiners Buy Sanctioned Iranian Oil Despite Sanctions
China and India are helping Iran evade U.S. sanctions by significantly increasing oil trade. China received 45 million barrels from Iran by mid-2024, with exports to China rising from 324,000 barrels per day in 2020 to 1.1 million by mid-2023. India and Iran have also committed to developing the Shahid Beheshti port in Chabahar, boosting regional trade despite U.S. warnings. These actions are the result of U.S. policy shifts resulting in the exponential growth of Sino-Indian-Iranian oil trade. The following is a brief comparison between the Trump and Biden administrations’ policy impact on Iran.
Policy Shifts Under Biden:
When President Biden took office in January 2021, he signaled a shift in U.S. policy toward Iran, expressing a desire to rejoin the JCPOA and ease sanctions. However, the MEI report card reveals that these diplomatic efforts have largely been unsuccessful. The administration’s policies have not effectively managed Iran’s regional influence nor curtailed its support for groups like Hamas, Hezbollah, and the Houthis, which continue to fuel instability in the Middle East, reflecting broader challenges in using diplomacy to significantly alter Iran’s activities and suggesting a need for a strategic reassessment to effectively address ongoing regional tensions.
The Trump Administration’s Approach:
From January 2017 to January 2021, under President Trump, the U.S. adopted a stringent “maximum pressure” strategy towards Iran. This involved withdrawing from the JCPOA in May 2018 and reinstating harsh economic sanctions aimed at crippling Iran’s oil revenue. The administration also enforced secondary sanctions that targeted entities trading with Iran’s oil sector, with the goal of reducing Iran’s oil exports to zero. Despite this pressure, China continued its oil transactions with Iran, though at reduced levels and often through indirect methods such as ship-to-ship transfers.
