Sanctions and discounts fuel flurry of deceptive tactics to move Iran and Russia crude into China

Russian and Iranian dark fleet tactics are adapting to new sanctions realities and growing market-fuelled demand from China. . . . According to preliminary figures from US advocacy group United Against Nuclear Iran, Tehran exported an average of 1.5m barrels per day of crude and condensates in 1Q25, about the same as the corresponding period last year. Iran has developed sophisticated mechanisms over the years to side-step US sanctions, and these proved handy as in keeping oil flowing amid the crackdown of recent months, according to UANI’s chief of staff Claire Jungman. “This persistence can be attributed to both Iranian adaptation and a broader global context,” she told Lloyd’s List.“On Iran’s side, the regime continues to exploit a well-established dark fleet, conducts ship-to-ship transfers in areas like the Malacca Strait or Riau Archipelago, and uses falsified documentation to mislabel crude as originating from countries like Malaysia or Oman.” “On the Chinese side, a supply-side shock in early 2025—driven by OFAC’s sweeping vessel-specific sanctions—triggered a ‘buy now, worry later’ approach, particularly for sanctioned barrels from Iran, Russia, and Venezuela,” said Jungman. “Chinese and Indian refiners began accelerating purchases in anticipation of potential enforcement tightening and logistical hurdles. Some of these barrels are only now arriving due to long-haul routes, while Iranian discharges in China have largely remained steady despite logistical tightening. There’s also a strategic calculus at play: with global prices dipping and long-haul volumes increasing, Chinese buyers are stockpiling, taking advantage of soft prices and elevated availability. Iranian crude — often sold at steep discounts — is especially attractive in this environment. Even as new designations pressure teapot refiners, the market’s flexibility and China’s appetite continue to absorb Iranian volumes.”