Iran Secured Oil Facilities in China, Leaked Letters Show

In letters to Hamid Bovard, then head of the National Iranian Oil Company and acting oil minister as of early October, Ali Shamkhani said intermediaries had been instructed to keep using shadow-fleet vessels to sustain oil trade with China, Iran International reported. Bovard wrote that the Foreign Ministry had negotiated to buy port facilities and oil terminals in China to create a hub for sanctioned Iranian crude, according to the documents.

Iran has also sought long-term leases on large storage facilities in several Chinese locations. Vessels under sanctions and controlled by Shamkhani’s son, Hossein Shamkhani, carried Iranian oil to terminals and storage sites controlled by Iran, the report said. Sources at Iran’s Oil Ministry told Iran International that Iran had bought control of port facilities at three locations in China and taken stakes in docks in Shandong province, where independent Chinese refiners are based.

The report said China had already been seeking distance from Iranian oil trade before the war, rejecting Tehran’s requests to raise import quotas for Chinese refiners, demanding deeper discounts and increasing crude imports from Venezuela. Since the war began, a U.S. blockade in the Gulf of Oman has further restricted Iran’s exports. Chinese independent “teapot” refiners have been seeking other discounted crude as Iranian volumes fell.

Iran has publicly said it will find ways around the blockade. But vessel-tracking services estimate that exports have dropped since August, while Iranian crude held in floating storage has been depleted amid the U.S. Navy blockade. “There’s no more oil to discharge to China anymore,” Kpler crude oil analysis head Homayoun Falakshahi told the Wall Street Journal last month.

Shamkhani and former supreme leader Ali Khamenei were killed in the first U.S.-Israeli strikes on Iran in February.