By Austin Ramzy and Rory Jones

China is a longstanding friend of Iran that has helped sustain the Islamic Republic through decades of sanctions and international isolation.

Since the U.S. and Israeli militaries began striking Iran late last month, Beijing has offered Tehran limited public support, condemning the killing of the Iranian leadership while calling on all sides to stop fighting. But its longstanding support for Iran could grow increasingly critical as the war continues.

Here's a look at how Beijing has sustained Tehran in recent years.

Oil sales to China

China is Iran's most important economic partner. Roughly 90% of Iran's 1.6 million barrels a day of crude oil exports are sold to China, providing Tehran with the equivalent of tens of billions of dollars of revenue each year.

China buys Iranian crude to support its ally and because it gets the oil at a market discount. Analysts estimate Iranian oil makes up 12% of China's total oil imports. The crude is mostly bought by small, independent Chinese refineries known as "teapots," whose import quotas are regulated by Beijing.

China doesn't accept the legitimacy of U.S. sanctions but wants to maintain plausible deniability since Beijing fears its companies could be subject to U.S. penalties should they engage publicly with sanctioned oil.

Beijing encourages the purchase of Iranian oil by the independent refineries, rather than its state-owned oil giants, since the smaller companies are unconnected to international financial markets and would thus be unaffected by potential U.S. sanctions. The origin of the crude is often masked by brokers.

Shadow banking

Iran manages a complex, clandestine shadow-banking network globally that is facilitated by China, U.S. officials allege. China's teapot refiners pay for Iranian oil in the Chinese currency, the yuan, and Tehran uses some of the money to buy products in China that are then shipped to Iran.

Some of the oil revenue is used as part of a barter-like system in which Chinese oil buyers shift money to state-backed Chinese companies to build infrastructure in Iran. Money from oil sales also moves through a web of front companies, often routed through Chinese financial institutions, to Hong Kong, before it is then converted into other currencies.

Much of the cash from oil sales to China remains in bank accounts abroad, in financial hubs such as Hong Kong, Dubai and Singapore, according to U.S. officials. Iranian importers and exporters then trade foreign currency among their various front companies on ledgers maintained in Iran. Hong Kong has denied it is used for sanctions evasion.

Weapons and rocket fuel

China was once an important supplier of arms to Iran during its war with Iraq in the 1980s, but it ceased approving weapons deals shortly before Beijing joined U.N. sanctions on Iran in 2007, according to the Stockholm International Peace Research Institute.

According to U.S. officials, Chinese companies continued, however, to be a critical supplier of goods with potential military applications, such as motors that have been used in Iran's Shahed drones, chemicals for rocket fuels and electronics for an array of weapons. China-based commercial satellite firms have participated in business exchanges with Iran's Islamic Revolutionary Guard Corps, the Pentagon said in December.

Last year, two ships linked to an Iranian state company left China loaded with 1,000 tons of a material that could be used to make a main ingredient for a solid propellant of some 260 midrange missiles, The Wall Street Journal has reported. In mid-2025, Iran ordered thousands of tons of missile fuel ingredients from China, according to Journal reporting. The Chinese government has said it is unaware of specific orders but maintains strict control on so-called dual-use items that have both civilian and military applications.

Days after the U.S. and Israeli attacks were launched on Iran, two more ships connected to the same entity, the Islamic Republic of Iran Shipping Lines, left a port in China, according to shipping-data company MarineTraffic. The movement of those ships has raised concerns that Chinese companies could be supplying more rocket fuel precursors to Iran, although the exact cargo hasn't been confirmed. The movement of those ships was earlier reported by the Washington Post.

China helped Iran's nuclear program in the 1980s, assisting with development of the Isfahan facility, Iran's largest nuclear-research complex, according to the Washington-based nonprofit the Nuclear Threat Initiative. While China has supported Iran's right to a civilian nuclear program, it has officially opposed Tehran developing nuclear weapons. In recent decades, China doesn't appear to have directly supported Iran's nuclear program but rather sold missile components and helped evade sanctions for dual-use goods, the bipartisan U.S.-China Economic and Security Review Commission said in a November report to Congress.

International ties

China has also helped Iran build international ties and reduce Tehran's isolation. In 2023, Beijing negotiated the restoration of diplomatic ties between Iran and Saudi Arabia, which was seen at the time as a major step into Middle East diplomacy by China. That detente has now been deeply frayed by Iran's attacks on Saudi Arabia and other countries in the region.

China also helped Iran join international bodies that expanded its global profile. Beijing and Moscow lobbied for Iran to join the group of emerging economies known as Brics in 2024. Iran also joined the Shanghai Cooperation Organization, a security-focused body led by Beijing and Moscow, in 2023, and in December it hosted counterterrorism exercises with troops from member states including China and Russia.

Write to Austin Ramzy at austin.ramzy@wsj.com and Rory Jones at Rory.Jones@wsj.com

(END) Dow Jones Newswires

March 18, 2026 10:08 ET (14:08 GMT)

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