Beijing moves in where the West pulled back

China's Foreign Minister Wang Yi recently met a representative from Iran's Supreme National Security Council in New Delhi, according to Nikkei Asia. The meeting is said to have laid the diplomatic groundwork for China's ambitions to lead Iran's post-conflict reconstruction – a push that analysts say is not merely about infrastructure, but about securing Beijing's strategic, long-term access to Iranian oil reserves.

China's advance is taking place in a vacuum created by Western withdrawal. European and British sanctions on Iran's energy sector remain fully intact, effectively preventing West European companies from participating – despite the US recently granting a temporary relief.

The sanctions opening does not create a new revenue stream for Iran – it makes an existing one far more profitable.
China sets its sights on Iranian oil after the war - Bilde 1

The US temporary sanctions relief

On 22 June 2026, the US Treasury Department issued General License X (GL X), a temporary 60-day authorisation legalising the production, delivery, and sale of Iranian crude oil, petrochemicals, and petroleum products through 21 August 2026. The relief is part of a broader Memorandum of Understanding between the US and Iran, signed on 17 June 2026, aimed at ending military hostilities.

According to geopolitical expert Brett Erickson at Obsidian Risk Advisors, this means in practice that the relief does not create a new revenue stream for Iran, but makes the existing one "far more profitable" by potentially eliminating sanctions-driven discounts and simplifying payment infrastructure.

$2.24–3.06 bn
Possible Iranian oil revenue over the 60-day period
$35 bn
Estimated additional annual revenue from permanent relief
China sets its sights on Iranian oil after the war - Bilde 2

China's dominance in Iranian oil trade

China has over a long period absorbed an estimated 90 percent of Iran's oil exports, building up a complex system to circumvent US sanctions. This includes the use of a shadow fleet of more than 1,500 vessels operating without transponders, re-labelling of oil as Malaysian or Middle Eastern after illicit ship-to-ship transfers, and payments in Chinese yuan through banks already subject to US sanctions.

The so-called "teapot" refineries in particular – small, independent facilities in Shandong province – have been the backbone of China's imports of sanctioned Iranian oil. Reuters and Kpler now report that state-owned giants such as Sinopec and PetroChina are considering resuming imports, as GL X provides them with a legal window.

Sumit Ritolia, lead analyst at Kpler, stresses that "the biggest beneficiary of any sanctions exemption on Iranian oil will likely be China, which needs crude oil for both refining and strategic stockpiling."

China is already saving billions by buying sanctioned oil at a discount – now Beijing wants the same oil, but at world market prices and without legal risk.

Rivals wait and watch

Despite the temporary opening, Asian rivals are cautious. South Korean, Japanese, and Indian refineries – all of which were pre-qualified to bid on Iranian contracts when the JCPOA was implemented in 2016 – are keeping to the shadows. They cite existing surplus inventories, the short-term duration of the 60-day window, and political uncertainty as deterrents, according to industry sources.

Lynn Song, Chief Economist for Greater China at ING, warned in June 2026 that there is "still uncertainty around the duration of this agreement" and that there is no immediate enthusiasm for lifting existing sanctions on Chinese importers.

European absence – a strategic gap

When the JCPOA was concluded in 2016, European companies such as Total, Shell, Eni, and Wintershall were queuing up to take part in Iran's energy sector. Now Europe is effectively out of the picture: British and European sanctions on Iran's energy sector are not covered by the US GL X authorisation, which complicates financing, insurance, and broader trade relations for companies in these regions.

This gap is precisely what Beijing is exploiting. While the West sits on the fence, China's state bank-backed companies are laying the groundwork for infrastructure deals – including airports and refineries – partly financed through a barter system in which oil is exchanged for project delivery, according to Western government estimates.

What happens after 21 August?

The key question is what happens when the temporary US-issued GL X authorisation expires on 21 August. Analysts are divided. If the MOU between the US and Iran leads to a more permanent agreement, Erickson estimates that Iran could generate $35 billion in additional annual oil revenues above 2025 levels. But uncertainty over the deal's durability means that most players – China aside – are not ready to make lasting commitments.

For Norway, the news is indirectly relevant: increased Iranian oil exports could put downward pressure on crude prices, which over time may affect Equinor's earnings and the oil fund's returns. The Brent price remained volatile throughout week 26 in line with the flow of news from the Middle East.