Sanctions on Iran benefit China the most

Iran's long-continuing friction with the West has led to the deepening of its cooperation with China. Sino-Iranian cooperation has developed much faster after then Donald J Trump administration pulled the US out of the 2015 Iran nuclear deal in 2018.

If the Western financial and diplomatic sanctions, slapped against Iran since the relatively modern Shah regime in Tehran was overthrown in February 1979, have benefitted one single country, it is communist China.

Observers say Iran's long-continuing friction with the West has led to the deepening of its cooperation with China. Sino-Iranian cooperation has developed much faster after then Donald J Trump administration in Washington pulled the United States out of the 2015 Iran nuclear deal in 2018. In March 2021, Iran and China signed a 25-year long-term agreement. Under this pact, China agreed to invest $400 billion in Iran's energy, infrastructure, and communications sectors. In turn, Iran would sell oil and gas to China at low prices and provide them access to its ports.　

After Trump's sanctions were reinstated in 2018, over 31 European and Asian companies announced their intention to end their activities in Iran. The companies included Boeing, Total, Peugeot, Maersk, Allianz, Siemens, Mazda, Mitsubishi, British Petroleum, and General Electric.

Chinese companies have been very active in Iran. Today China is Iran's largest trading partner and investor. Oil sales to China generate $10 billion annually for Iran. Iran currently exports 1.1 million barrels of oil per day. Of this, it exports about a huge one million barrels daily to China.

Iranian oil arrives in China as if it was imported from Oman, the United Arab Emirates, or Malaysia. In December last year, China loaded about four million barrels of Iranian oil as reserves. In 2020, China accounted for about 43 per cent of all Iranian exports. Iran exported $6.1 billion worth of goods to China.

The observers add that, in between May 2018 and August 2021, Iran lost over $120 billion in oil export revenues from the US withdrawal from the nuclear agreement. The Trump administration　added sanctions against the companies directly belonging to the heads of the Iranian government.

Select groups of Islamic companies control a sizable portion of the Iranian economy. They report directly to Iranian Supreme Leader Ayatollah Ali Khamenei. They are not subject to any public scrutiny. Asthan Quds Razvi, one of the most well-known companies, was founded by Khamenei himself. Current Iranian President Ebrahim Raisi happens to be a trustee of this. Bonyad Mostazafan is ostensibly a charitable organization charged with providing benefits to the poor and oppressed. Its holdings are expropriated from the Iranian people and are used by Ali Khamenei to enrich his office, reward his political allies, and persecute the regime's enemies. In April 2019, the value of Khamenei's assets was estimated at $200 billion.

(Jagdish N. Singh is a senior journalist based in New Delhi. He is also Senior Distinguished Fellow at the Gatestone Institute, New York)

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