The United States is escalating its economic pressure on Iran, with President Donald Trump threatening an "economic D-Day" and Treasury Secretary Scott Bessent announcing plans for unprecedented sanctions. This move is intended to force Iran to reopen the Strait of Hormuz and end the ongoing conflict, with Bessent stating that details of the plan, including potential secondary sanctions against countries and companies doing business with Iran, would be unveiled on Monday. The administration aims to isolate Iran by targeting its primary source of hard currency: oil sales.
However, this US strategy faces considerable obstacles from China and Russia, two major trade partners with Iran. Analysts, including Paul Musgrave of Georgetown University in Qatar, note that Trump's leverage over these countries is limited. Russia is already under extensive US sanctions and operates largely outside the US-led economic framework. China has consistently demonstrated a willingness to disregard US sanctions when it aligns with its economic interests. Yu Jie, a senior research fellow at Chatham House, believes that Trump's threats will not alter China's trading relationship with Iran, especially as Beijing seeks to stabilize ties with Washington.
Despite the US blockade, which has reportedly reduced Iranian crude offers to China and increased prices, China remains a crucial buyer, purchasing 80% of Iran's shipped oil in 2025. While sanctioning major Chinese banks could be impactful, it risks a retaliatory response from China during a delicate diplomatic period. Independent Chinese refineries, which account for about a fifth of China's refining capacity and are major buyers of sanctioned oil, have continued to process Iranian crude even after previous sanctions. China's Foreign Ministry spokesman, Lin Jian, reiterated that more sanctions would not resolve the issue and called for diplomatic solutions. Russia, a smaller but growing trade partner, signed a 20-year partnership treaty with Iran in January 2025, boosting their trade volume to $4.8 billion in the first 11 months of 2025.
The current US blockade has already impacted Iranian oil exports to China. Offers of Iranian crude for September and October delivery have declined, and prices have surged, with some Iranian crude offered at premiums to ICE Brent futures. The amount of Iranian crude in floating storage outside the US blockade zone has decreased from about 105 million barrels to approximately 80 million barrels, with only around 30 million barrels remaining in Asian waters. Chinese independent refiners, or "teapots," are now exploring alternatives beyond Russian and Iranian oil. China's Iranian oil imports fell to 785,000 barrels per day in June, the lowest since February 2023, though they likely rose to 823,000 bpd in July before dropping to 534,000 bpd in August, compared to an average of 1.4 million bpd last year.
