Iran has secured control of oil terminals and storage facilities at several locations in China to help transport and sell its sanctioned crude despite US restrictions, according to a confidential letter obtained by Iran International and accounts from sources in Iran's Oil Ministry.
uncertain
Iran → secure → Ministry
The arrangement involves Iranian-controlled port facilities, long-term leases and oil storage tanks that allow sanctioned tankers to unload crude directly in China, reducing the need to transfer cargoes between vessels or rely on conventional shipping routes.
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tankers → involve → routes
In his letter, Bovard criticised the oil-trading policies of former president Ebrahim Raisi and described an alternative arrangement developed under President Masoud Pezeshkian, involving what he characterised as covert cooperation from China.
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he → criticise → China
According to Bovard, Iranian authorities instructed trusted oil intermediaries to continue using sanctioned vessels capable of docking at designated Chinese ports.
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authorities → accord → ports
The Iranian foreign ministry negotiated access to port facilities and oil terminals, while Tehran secured long-term leases on storage infrastructure to facilitate the direct sale of Iranian crude in the Chinese market.
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Tehran → negotiate → market
Two Iranian oil ministry sources told Iran International that Tehran had acquired control of facilities at three locations in China.
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Tehran → tell → China
These include a terminal in the Ningbo-Zhoushan free trade zone, where Iran reportedly gained control after helping build smaller transit facilities, as well as stakes in smaller docks at Qingdao and Pant in Shandong province.
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Iran → include → province
The docks are located close to pipelines, allowing crude to be transported to Chinese refineries without being transferred to other vessels, the sources said.
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sources → locate → vessels
Iran has also purchased seven oil storage tanks in China, according to the report.
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Iran → purchase → report
Four are located at the ports of Dalian and Huizhou and in the coastal cities of Dongying and Weifang.
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Four → locate → Dongying
The oil ministry controls three others in the Zhoushan area of the Ningbo-Zhoushan archipelago, including facilities on Aoshan and Shulanghu islands and in the Zengyamuo oil zone.
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ministry → control → zone
The facilities are reportedly being used by tankers linked to Hossein Shamkhani, son of Ali Shamkhani, who operates a shadow fleet.
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who → use → fleet
Iran International said the arrangement allows these vessels to continue delivering Iranian crude despite US sanctions.
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vessels → say → sanctions
The US Treasury has sanctioned 51 vessels linked to Hossein Shamkhani.
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Treasury → sanction → Shamkhani
How Iran and China keep oil trade flowing
China has long been central to Iran's efforts to sustain oil exports despite US sanctions.
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China → keep → sanctions
It is the biggest buyer of Iranian crude, with independent Chinese refineries, commonly known as “teapot” refineries, purchasing much of the oil through intermediaries.
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refineries → know → intermediaries
China accounted for more than 80% of Iran's shipped oil exports in 2025, averaging around 1.4 million barrels per day, according to Kpler data cited in a Reuters report.
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China → account → report
The two countries have also developed a barter-like payment mechanism that allows Iran to convert oil proceeds into credits for purchasing Chinese goods, bypassing conventional international banking channels.
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Iran → develop → channels
Under the arrangement, proceeds from Iranian oil sales are channelled through a special-purpose vehicle (SPV), which pays Chinese suppliers for goods ranging from medicines and vehicles to communication equipment.
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which → channel → equipment
The system allows Chinese companies to receive payments without directly dealing with Iranian buyers or using conventional international banking channels, limiting their exposure to US sanctions.
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companies → allow → sanctions
China, meanwhile, continues to access discounted Iranian crude.
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China → continue → crude
China seeks deeper discounts as Iran faces pressure
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Iran → seek → pressure
Despite the arrangements, Bovard's letter suggests that Tehran has faced growing resistance from Beijing over its oil trade.
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Tehran → suggest → trade
According to the correspondence, China rejected Iran's request to increase crude import quotas for Chinese refineries, raised purchases from Venezuela and demanded deeper discounts on Iranian oil.
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China → accord → oil
The letter also exposed tensions within Iran's oil-trading network, particularly over the role of Hossein Shamkhani and other intermediaries.
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letter → expose → Shamkhani
Bovard alleged that Hossein Shamkhani had used loans from the Iranian government to purchase vessels but deployed them to transport Russian oil rather than Iranian crude.
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Shamkhani → allege → crude
He also accused him of receiving Iranian oil on consignment without providing collateral and selling it on the market.
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He → accuse → market
Bovard portrayed the United Arab Emirates as Shamkhani's exclusive trading domain, alleging that the oil ministry had effectively become an agent for his business interests.
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ministry → portray → interests
The letter also disputed Ali Shamkhani's assessment of the discounts at which Iranian oil was being sold.
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oil → dispute → which
Shamkhani had reportedly told Khamenei that the discount stood at 50 cents per barrel under Raisi, compared with $9 per barrel under Pezeshkian.
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discount → tell → Pezeshkian
The latest disclosures follow an earlier Iran International report in September, which said that Mohammad Javad Bavand, a special assistant to the oil minister, had instructed four intermediaries, including Hossein Shamkhani, to sell 86 million barrels of Iranian crude at an 8.5% discount.
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Bavand → follow → discount
Although China remains Iran's most important oil customer, the reported demand for larger discounts and restrictions on import quotas suggest that Beijing's willingness to accommodate Tehran may have limits.
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willingness → remain → limits
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