China and Iran have concluded a multibillion-dollar “oil-for-projects” deal in which Iranian crude will be exchanged for investment in Chinese infrastructure, a move aimed at helping Tehran circumvent US sanctions,
Under the arrangement, Iran ships oil to China, and instead of receiving cash payments via traditional banking channels, Chinese state firms now commit to building public works, energy installations, and other projects in Iran.
The mechanism is reportedly engineered to steer clear of the international banking system, and this is reducing exposure to U.S. secondary sanctions.
Behind the Deal: How China Workaround Keeps Iranian Oil Flowing
The deals is to insured by the China’s export credit agency, Sinosure, and facilitated by a covert financial vehicle known as “Chuxin,” which isn’t officially listed among Chinese financial institutions.
The money flows are structured so that Chinese buyers deposits money with Chuxin, which then pays contractors to executing the projects in Iran.
Meanwhile, crude is often delivered via ship-to-ship transfers and mixed with oil from third countries to mask its origin, according to the WSJ report. Western intelligence officials put the value of oil revenues channeled into these deals at up to $8.4 billion last year.
Chinese state officials told the WSJ they were “unaware of the arrangement” and insisted Beijing opposes unilateral sanctions, though they did not directly deny the deal’s existence
The agreement cements deeper economic ties between Beijing and Tehran, posing a direct challenge to U.S. efforts to isolate Iran.
Observers will now monitor whether Washington responds with additional sanctions or legal action against Chinese entities that facilitate the exchange.
Watch A CBS News on July investigation that revealed China is still secretly buying Iranian oil and evading US sanctions by using what is known as the “Dark Fleet” to transfer oil from ship to ship in the middle of the ocean.
