Russia, Iran deal with Western sanctions through oil sales to China
(MENAFN) For both Iran and Russia, oil revenues serve as vital pillars of their economies, yet the imposition of Western sanctions poses a significant threat to their ability to export oil and receive payments. In response to these challenges, both countries have turned to China, the world's largest importer of crude oil, as a key partner. In 2023, China emerged as a crucial lifeline for Iran and Russia, saving an estimated ten billion dollars by purchasing crude oil from these sanctioned nations.
The symbiotic relationship between Beijing and Tehran has evolved over the years, resulting in the establishment of an alternative oil trading system that bypasses Western banks and shipping services. Leveraging this system, Iran and Russia have successfully redirected their oil shipments to China, ensuring a steady flow of revenue despite the sanctions regime. This strategic maneuvering has enabled Iran and Russia to sustain their oil exports and mitigate the adverse effects of Western sanctions.
A report recently published by the Atlantic Center sheds light on the tactics employed by Iran and Russia to evade sanctions in the oil sector. Notably, Russia adopted Iran's methods following the Group of Seven's decision in December 2022 to set the price of Russian crude oil at sixty dollars per barrel. This development underscored the urgency for Russia to seek alternative avenues for oil sales, leading to a closer alignment with Iran's established trading practices.
Central to this alternative market for sanctioned oil is the denomination of payments in Chinese currency, reflecting China's growing influence in the global oil trade. Moreover, the transportation of oil often involves the use of "dark fleet" tankers, which operate from naval bases and employ tactics to conceal their activities. This clandestine approach further highlights the lengths to which Iran, Russia, and China are willing to go to circumvent Western sanctions and maintain their oil trade.
In summary, the collaboration between Iran, Russia, and China in the oil sector underscores the shifting dynamics of global geopolitics and the growing influence of non-Western powers in shaping the international economic landscape.
MENAFN04042024000045015682ID1108057802
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.