Iran's $6 Billion Oil Rush: How Tehran Quietly Moved 70 Million Barrels Toward China Before US Blockade Returned

Iran shipped out roughly 70 million barrels of oil worth up to $6 billion during a brief one month window when the US lifted its blockade. The oil was routed through waters off Malaysia and transferred at sea before heading to Chinese refineries, giving Iran a financial cushion now that the US blockade is back in place.

For about a month this year, Iran had a rare opening, and it took full advantage. When Washington briefly lifted its blockade on Iranian oil shipments, Tehran flooded the market, unloading roughly 70 million barrels of crude worth as much as $6 billion before the US clamped back down.

The US had blocked Iranian oil exports for a long time as part of its pressure campaign, but that changed in mid June when Washington and Tehran signed a temporary agreement lifting the blockade. Iran didn’t waste a moment. Tankers already sitting full at the country’s eastern Chabahar port set sail for Asia almost immediately after the deal was signed on June 17, the Wall Street Journal reported.

By the second half of June alone, Iran had exported around 50 million barrels bound for China, a volume that matched roughly a full month of pre war exports to that country.

The window didn’t stay open long. The US eventually reimposed its blockade on the Strait of Hormuz, cutting off the flow once again. But by then, Iran had already banked a substantial cushion. Jonathan Panikoff, a Middle East expert at the Atlantic Council, told the Wall Street Journal that Iran’s economy is currently in its worst shape since the 1979 revolution, which makes every dollar of oil revenue significant. He noted the regime will likely funnel that money toward its own priorities, particularly its ongoing conflict with Washington.

READ MORE: Strait Of Hormuz Tracker: Tanker Traffic Hits Three-Week Low Amid Renewed US-Iran Conflict

Once there, the oil gets transferred at sea, ship to ship, using massive hoses. The tankers that receive the oil then typically continue on toward small independent refineries in China, often called teapot refineries, which buy Iranian crude at a discount. Because the transfer happens offshore and away from either country’s direct territory, it becomes much harder for US regulators to trace and penalize.

Analysts expect the ripple effects to continue. Given how many tankers reached Asian waters in July, they anticipate Iran will keep collecting billions in oil revenue over the coming months, even with the blockade back in force.