Trump
Iran’s oil exports have experienced significant fluctuations due to U.S. policy changes. Under the Biden administration, Iran’s oil exports rebounded strongly as the U.S. and its allies sought to revive the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal, which was abandoned during the Trump presidency.
This revival saw Iran’s oil production climb from less than 2 million barrels per day (mb/d) in late 2020 to 3.2 mb/d under Biden’s tenure. China, Iran’s largest oil customer, accounted for 13% of these exports. However, this scenario could change dramatically if Donald Trump returns to the White House in 2025.
In a July speech at the Republican National Convention, Trump vowed to curtail Iranian oil exports, a strategy he previously employed by threatening countries like China with severe trade penalties for buying Iranian oil.
Trump’s policy effectively reduced Iran’s oil production from 3.8 mb/d in early 2018 to less than 2 mb/d by late 2020. Analysts believe that Trump may link the reduction of Iranian oil exports to his broader trade agenda with China, potentially triggering higher global oil prices.
China’s current oil imports from Iran often bypass sanctions through indirect routes involving countries like Malaysia. Reports indicate that China imported 1.456 mb/d of crude oil from Malaysia in June 2024, despite Malaysia’s production capacity being significantly lower.
The discrepancy suggests that most of this oil originated from Iran, transported via a network of aging tankers in risky ship-to-ship transfers. These transactions, often conducted with transponders turned off, pose environmental and navigational hazards, such as the July collision of two tankers near Singapore.
Sanctions have already begun to impact Iranian oil exports. The Biden administration froze some vessels engaged in ship-to-ship oil transfers to China, causing Iranian crude imports by China to drop to a four-month low of 1.31 mb/d in November.
This has tightened the shipping market and reduced the discounts on Iranian oil, narrowing the price gap between Iranian Light crude and Brent crude.
Despite these challenges, China and Iran have built a resilient trade network that relies on yuan transactions and middlemen to evade U.S. financial oversight.
This system helped China save billions and solidify its role as Iran’s top oil market. Trump’s potential crackdown could disrupt this network but would face complications, including global oil supply concerns and the impact on U.S. fuel prices.
Meanwhile, India is emerging as a new driver of global oil demand, overtaking China’s growth in 2024. India’s oil demand rose by 180,000 bpd in 2024, compared to China’s 148,000 bpd.
Projections for 2025 show India’s oil demand growing by 3.2% year-on-year, outpacing China’s 1.7%. Analysts attribute this shift to China’s slowing economy and its booming electric vehicle sector, which is reducing reliance on fossil fuels.
India, in contrast, continues to rely on traditional energy sources like coal, which it views as critical to its long-term energy strategy.
