 "Trump threatens sanctions over Iranian oil: What it means for India, China")
US President Donald Trump has once again threatened sanctions on any country importing oil or petrochemical products from Iran, rekindling tensions in global energy markets and placing key buyers like China and India in a diplomatic bind.
Trump’s latest statement, made on social media, warned that all purchases of Iranian crude “must stop, NOW,” and declared that violators “will not be able to do business with the United States in any way, shape, or form.” His comments are a revival of the ‘maximum pressure’ campaign that defined his first term in office, during which he withdrew the US from the 2015 nuclear deal and imposed sanctions that choked off over 80 per cent of Iran’s economy.
China: Iran’s top oil customer
China has emerged as Iran’s primary lifeline in the crude trade. According to US Energy Information Administration data, nearly 90 per cent of Iran’s crude oil and condensate exports in 2023 were shipped to China. In March this year, China’s Iranian oil imports surged to a record 1.8 million barrels per day (bpd), as buyers rushed to secure supplies ahead of anticipated sanctions. Analytics firm Kpler confirmed a 20 per cent month-on-month increase in Chinese imports, marking a five-month high.
Iranian crude now accounts for almost 16 per cent of China’s March seaborne oil imports, with most shipments trans-shipped via Malaysia and Singapore and rebranded to obscure their origin, according to a report by Reuters, citing traders and analysts. The covert trade continues despite previous US sanctions, with many vessels opting for high-risk, high-reward routes, often avoiding detection due to lax enforcement.
Trump’s latest threat appears squarely aimed at Beijing, whose energy dependence on Iranian oil has only deepened amid growing strategic alignment between the two nations.
However, Scott Modell, a senior adviser to US Special Operations Command on counter-threat, told CNBC that without targeting Chinese state-owned enterprises and shipping infrastructure, any new US sanctions may have limited bite.
The president’s statements “don't signify a change in the administration’s drive to reach a new deal with Iran but rather underscore Trump's belief in negotiating through strength,” Modell said.
India: Out of the Iranian crude market since 2019
India, on the other hand, has had a far more cautious approach. Following Trump’s earlier sanctions regime, India halted all Iranian crude oil imports by mid-2019. At the time, Iran was India’s third-largest oil supplier, and its exit from New Delhi’s energy mix forced Indian refiners to diversify toward costlier alternatives.
However, Iran has shown interest in rekindling energy ties with India. A senior Iranian official in January spoke to reporters about Tehran’s desire to resume crude exports to India and deepen cooperation in petrochemicals and port infrastructure, particularly around the Chabahar port, where India operates the Shahid Beheshti terminal under a 10-year agreement.
Despite geopolitical constraints, India has expressed interest in non-oil trade areas such as tourism, agriculture, and petrochemical investments, although energy imports remain off the table under the threat of US sanctions.
US-Iran trade talks to take place soon
Talks between Iran and the United States over Tehran’s nuclear programme were scheduled for Saturday, May 3, but have been postponed for “logistical reasons”.
Iran’s Foreign Minister Abbas Araghchi posted on social media that Tehran remains committed to finding a negotiated settlement. “We are more determined than ever to achieve a just and balanced deal: guaranteeing an end to sanctions, and creating confidence that Iran’s nuclear program will forever remain peaceful while ensuring that Iranian rights are fully respected,” he wrote.