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China is helping Iran avoid sanctions through a multibillion-dollar oil-buying scheme

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Photo by Noel Celis - Pool/Getty Images

Several Chinese companies are helping Iran avoid sanctions by importing illicit Iranian crude oil.

A network of Chinese petrochemical refiners provided the Iranian regime with at least $22 billion in revenue since President Joe Biden took office, the Washington Free Beacon reported.

According to information obtained by United Against a Nuclear Iran (UANI), Chinese oil refiners known as teapots, which are semi-independent entities that are not controlled by the Chinese Communist Party, are largely responsible for “funding this illicit and uniquely lucrative trade” with Iran. UANI is an advocacy group that is dedicated to exposing the people and entities responsible for helping Iran evade economic sanctions.

China’s use of teapots is a part of a coordinated effort to evade internationally supported sanctions on Iranian oil. Through this network, the Chinese government has been able to purchase Iranian crude oil well below the market price while keeping the oil’s point of origin under wraps.

By using teapots, China is able to protect its corporate, state-owned oil firms from sanctions.

The teapot network allows China to bypass the use of its state-controlled refineries and misrepresent the purchases as originating from countries other than Iran.

This scheme has allowed China to import at least $22 billion in Iranian crude oil since Biden entered office and relaxed sanctions on the Iranian regime as part of his administration’s strategy to secure favorable conditions with Iran as it moved to reinitiate its nuclear development program.

Before Biden took office, China was importing an average of 400,000 barrels of oil per day from Iran. After Biden become president, China has, on average, imported around 1,000,000 barrels per day, according to data gathered by UANI.

Documents obtained by UANI indicate that “the bulk of Iranian oil is indeed being imported by the teapots.” Records analyzed by UANI show at least 40 different shipments of Iranian oil to China dating back to 2019.

In a policy brief that outlined China’s teapot scheme, UANI said, “The fact that teapots — rather than major state actors — would import the bulk of Iranian oil makes sense from China's perspective. Since the U.S. has in fact sanctioned Chinese state-owned imports in the past, such as Zhuhai Zhenrong, the decision to import Iranian oil via dozens of small unaffiliated ‘non-state' firms helps obscure the Chinese government's role and protect its own big firms from scrutiny, accountability, and attendant sanctions."

The group said, “With their small size and limited business operations, teapots are both are to uncover and not exposed to the U.S. financial system.”

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