Research Report: 'Cheap Oil' is the Reason for China's Support of the Iranian Government

A research report based on available statistics shows that as the economic crisis peaks and Iran's weakening in the global oil market increases, the Islamic Republic's dependence on illegal oil sales to China has grown. According to the Iran Open Data website, the statistics indicate that with the 'peak of the economic crisis in Iran' and 'increasing weakening of Iran in the global oil market,' the Islamic Republic's dependence on China has increased with 'growing illegal oil sales.' The report states that in past years, Iran was 'one of the main players in the global energy sector' and that any hypothetical disruption in Iran's oil production or threats by the Islamic Republic to 'close the Strait of Hormuz' would lead to a global increase in energy prices. However, the United States has 'consolidated its position in the global energy scene over the past decade with its crude oil exports' to 'Europe, Southeast Asia, and even the Middle East.' Furthermore, the U.S. has managed to become a 'reliable source of liquefied natural gas for Europe,' thereby reducing 'European countries' dependence on Russian gas.' According to OPEC charts, the volume of Iran's official crude oil exports has shown a reverse trend over the past decade, and 'waves of fluctuations in Iran's export market are observable.' The report adds that 'nuclear negotiations of the JCPOA from 2016 to 2018 led to an increase in Iran's oil exports,' but after the previous U.S. administration's withdrawal from the JCPOA, 'this amount decreased.' Existing statistics show that 'with the rapid growth of India's economy and its population, Iran has lost its position as a supplier of crude oil to India.' The Iran Open Data website has stated that Iran has lost the 'OECD countries' market' due to sanctions. According to this report, 'the total population in 18 OECD countries is less than that of China,' although 'these countries play a significant geopolitical role in the world and have considerable power in multinational organizations such as the United Nations, the European Union, the World Bank, AFC, EBRD, and NATO,' and 'if Iran does not trade with OECD countries, its strategic importance weakens.' The chart below shows that the clandestine sale of Iranian crude oil to China has increased. According to some reports, Iran's unofficial oil sales to China 'have been over one million barrels per day in recent months,' and by combining the volume of official and illegal crude oil sales, about 70% of Iran's crude oil exports are directed towards China. Additionally, 'no other OPEC member is as dependent on a single buyer as this,' and according to the Iran Open Data report, 'it is said that the IRGC officials and other intermediaries of the government are satisfied with the clandestine oil sale method due to the huge income from brokering,' and 'Beijing is also pleased with buying oil at high discounts from intermediaries and thus supports the Iranian government.' This article was prepared using the Iran Open Data report.