China has been using a covert financial system to pay Iran for oil, circumventing U.S. sanctions and strengthening economic ties between the two countries, according to Western officials.
The mechanism, described as a barter-style conduit, allows Iran to ship crude oil to China—its largest buyer—while Chinese state-owned firms carry out infrastructure projects in Iran as payment. Officials say the system relies on Sinosure, China’s state export-credit insurer, and a little-known financial entity called Chuxin, which operates outside the formal banking network.
By avoiding the international payment system, the channel has become a financial lifeline for Tehran, helping fund major projects despite U.S. efforts to choke off Iran’s oil revenue. Western estimates suggest roughly $8.4 billion in oil payments moved through the conduit last year to finance Chinese-led construction in Iran.
Iran exported about $43 billion worth of oil in 2024, with around 90% reportedly going to China, according to U.S. Energy Information Administration data and Western officials.
