Al-Fassel | 2025-10-20

Recent investigation by The Wall Street Journal have unveiled a secret financial architecture between Iran and China. This arrangement is enabling Tehran to bypass stringent US sanctions.

At the center of this arrangement is a sophisticated oil-for-concrete scheme, which sustains Iran’s struggling economy. It also raises critical questions about international governance and the role of sanctions in crippling Iran’s malign activities.

The investigation showcase the lengths Iran will go to sponsor terrorism and destabilize the Middle East.

A Sophisticated operation

Iran’s economy has been battered by US sanctions, which have restricted its ability to export oil and access international financial markets. Yet, China, the world’s second-largest economy, has become a lifeline for Tehran.

Beijing buys 90% of Iran’s exported oil and 25% of its non-oil goods, but the way these transactions are handled is anything but straightforward.

At the heart of this scheme is a secretive payment system involving Sinosure, China’s state-owned export credit insurer. It also involves Chuxin, an obscure financial conduit not listed among China’s registered banks.

Iranian oil is shipped to China by companies tied to US-sanctioned trader Zhuhai Zhenrong. Payments for the oil are deposited with Chuxin, which then transfers funds to Chinese contractors working on infrastructure projects in Iran insured by Sinosure.

In 2024 alone, an estimated $8.4 billion flowed through this network. This funded airports, refineries, and transportation systems in Iran’s critical infrastructure that sustains its economy and destructive geopolitical ambitions.

Beyond oil-for-concrete, a barter network involving Iran’s auto and metals industries plays a key role. Major Chinese automakers like Chery, and metals firms such as Tongling Nonferrous Metals Group export car parts to Iran. These parts are assembled locally into finished vehicles.

Instead of cash payments, these companies accept shipments of Iranian copper and zinc, which intermediaries resell globally.

In 2023, Iran exported $6.1 billion worth of industrial metals, with China as its top customer. These barter arrangements bypass traditional banking channels, creating layers of complexity that obscure the true nature of the transactions.

Threat to global security

This covert financial architecture isn’t just about keeping Iran’s economy afloat. It’s also about funding its regional proxies and state-sponsored terrorism.

Groups like Hezbollah, Hamas, and the Houthis in Yemen rely on Iranian financial and material support. Much of this support is made possible by the revenue generated through sanctions evasion networks.

As Beijing and Tehran refine their methods for circumventing sanctions, the issue extends beyond Iran’s economic survival. It raises serious concerns about the broader impact on international governance.

Without continuous intervention, Iran will persist in destabilizing the Middle East, financing terrorism, and undermining the integrity of global financial systems.