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US Sanctions Threaten China-Iran Methanol Trade Supplying 40% of China's Demand Amid Secondary Sanctions Warning

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Updated May 7, 2025, 06:17 PM

US sanctions are threatening to disrupt trade between China and Iran, particularly affecting the supply of plastic materials and methanol exports. Chinese plastic suppliers risk losing access to the Iranian market due to these sanctions, which could impact the flow of plastic materials into Iran. Iranian methanol exports to China, which currently account for about 40% of China's methanol supply crucial for its coastal plastics plants, may also come under increased US scrutiny following Washington's warnings of secondary sanctions on buyers of Iranian oil and petrochemicals. As a result, China might pivot to alternative suppliers in Southeast Asia and South America, similar to its approach with Iranian oil.

Experts emphasize that US policy must be prepared to sanction any Chinese company involved in these trades to effectively squeeze Iran's oil revenues. Additionally, Iran continues to transfer oil to China using shadow fleets of tankers that are difficult to track, complicating US efforts amid ongoing tariff tensions between Washington and Beijing. Meanwhile, China has stated it can easily replace US agricultural imports, including sorghum, corn, and soybeans, with other sources, reducing its leverage in trade disputes with the US.

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Sources

fdd.org(2)bloomberg.com(2)nationalinterest.org dw.com

National Interest

@TheNatlInterest

To squeeze the Islamic Republic’s oil revenues, U.S. policy must understand that no Chinese company is too big to sanction, write Saeed Ghasseminejad and Matthew Zweig. https://t.co/DftEka5B2f

DW فارسی

@dw_persian

Iran ships its oil to China via “shadow fleet” tankers; oil tankers whose tracking has always been difficult. Now with a tariff war between Washington and Beijing, America has lost some of its leverage over China. https://t.co/LOjC8NDpKB

Remix News & Views

@RMXnews

🇨🇳🇺🇸 China says it can easily replace US crops for its domestic market. “In 2024, the import of sorghum, corn, soybeans and other grains from the US accounted for a very low proportion of China's domestic grain consumption.... These products are highly substitutable." https://t.co/unFkBihYyT