The US says it’ll crack down on countries doing business with Iran. Who’s buying Iranian oil?

Key Points:

• US Treasury Secretary Scott Bessent threatened an “economic D-Day” against countries buying Iranian oil, implicitly targeting China, which accounts for about 90% of Iran’s oil exports and provides significant revenue to Tehran.
• Bessent emphasized quiet diplomacy and warned countries of US expectations without naming China directly, while China condemned sanctions as counterproductive and escalating tensions.
• China has already reduced Iranian oil imports from 1.4 million barrels per day pre-war to around 700,000 barrels recently, and experts suggest a complete halt would have limited immediate impact due to China's large crude inventories.
• New US sanctions could further strain US-China relations amid ongoing trade tensions and recent reciprocal sanctions, with China viewed as the most influential actor in curbing Iran’s funding.
• The impact of sanctions is complicated by opaque oil flows through the Strait of Hormuz and the use of shadow fleets, while global oil prices and US consumer gas prices have already been affected by the conflict and instability in the region.