China aids Russia and Iran in evading Western sanctions, says think tank

A recent report from the Atlantic Council highlights how China has been aiding Russia and Iran in bypassing Western sanctions on their oil exports. The two nations have turned to China's smaller refineries, known as "teapots," to sell their oil, allowing them to funnel funds through local Chinese banks while appearing as foreign vessels.

Critics argue that China's assistance to Russia and Iran is solely to protect its own interests. The report notes that the use of Chinese currency and payment systems in this market restricts Western jurisdictions' access to financial transactions data and weakens their sanctions enforcement efforts.

Iranian fleet tankers have been sailing without transponders, often passing themselves off as vessels from Malaysia or the Middle East upon arrival in China. These tankers have been able to clandestinely sell 90% of Iran's total oil exports to Chinese teapot refineries, while state-owned Chinese refiners have avoided purchasing Iranian oil due to fears of sanctions.

The report also highlights Russia's efforts to mimic Iran's strategy by sending its "shadow fleet" to China and increasing Renminbi trading following the G7's oil export price cap. However, China's assistance to Russia is seen as limited to safeguarding its own interests, as demonstrated by three out of four Chinese banks halting payments from sanctioned Russian firms after the US introduced new secondary sanctions in December 2023.

Overall, the report paints a picture of China playing a significant role in helping Russia and Iran evade Western sanctions on their oil exports. While this assistance may benefit China in some ways, it also raises concerns about the effectiveness of international sanctions and the ability of countries to enforce them in the face of covert maneuvers and alternative markets.


More from Press Rundown