PARIS, France: Iran-China oil trade has used a barter-like mechanism that lets Tehran exchange oil proceeds for Chinese goods outside normal international banking channels.
According to Reuters, two senior Iranian sources and three other people familiar with the system said Iran used it to buy medicines, vehicles, communications equipment and other goods from China.
The officials also used the mechanism at least once in the past year for contracts covering air-defence equipment worth millions of dollars. Reuters said it could not independently verify those transactions.
Sources estimated that between USD 2 billion and USD 2.5 billion flowed through a special-purpose vehicle over the past year. They said the arrangement has existed since at least 2021 and was first used to supply medicines and COVID-19 vaccines to Iran.
Under the system described to Reuters, a buyer acting for Chinese state-owned oil trader Zhuhai Zhenrong deposited funds with a China-based entity known as ChuXin. Part of the proceeds then moved into accounts used to pay Chinese suppliers.
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China’s foreign ministry said it was “not familiar with the situation” Reuters described and reiterated its opposition to unilateral sanctions that the United Nations Security Council has not authorised.
Kpler data cited by Reuters showed China bought more than 80% of Iran’s shipped oil in 2025, averaging about 1.4 million barrels per day.
