U.S. President Donald Trump is restoring the “maximum pressure” campaign on Iran, aiming to drive down the Islamic Republic’s oil exports to zero.
But at the same time, President Trump signaled a willingness to negotiate a new nuclear deal with Iran that would allow it to “peacefully grow and prosper”—without obtaining a nuclear weapon.
“I would much prefer a Verified Nuclear Peace Agreement, which will let Iran peacefully grow and prosper. We should start working on it immediately,” President Trump posted on social media platform Truth Social, a day after restoring the “maximum pressure” campaign on Iran.
President Trump also added in his post that “Reports that the United States, working in conjunction with Israel, is going to blow Iran into smithereens, ARE GREATLY EXAGGERATED.”
In his first term in office, President Trump in 2018 withdrew the U.S. from the so-called Iran nuclear deal, or the Joint Comprehensive Plan of Action (JCPOA) as it is officially known, negotiated by President Obama.
The withdrawal from the deal was accompanied by renewed U.S. sanctions on the Iranian oil industry and its exports. These sanctions reduced Iran’s oil exports, but more than 1 million barrels per day (bpd) continue to be shipped – via shadow fleet tankers and opaque oil trading networks.
China has been the biggest beneficiary of Iranian oil still reaching the market. Most of Iran’s oil has been shipped to China since 2018.
China’s private refiners are key buyers of Iran’s sanctioned crude, and the two sides have established a trade relationship favorable for both. Iran gets to sell its crude that nearly everyone else shuns, while China’s independent refiners, the so-called teapots, get cheap oil at discounts.
With President Trump, this convenient Iran-China relationship is under threat. Not least because in a National Security Presidential Memorandum (NSPM) this week, President Trump directed the Secretary of State to modify or rescind sanctions waivers, particularly those that provide Iran any degree of economic or financial relief, including those related to Iran’s Chabahar port project.
The Secretary of State shall also “implement a robust and continual campaign, in coordination with the Secretary of the Treasury and other relevant executive departments or agencies, to drive Iran’s export of oil to zero, including exports of Iranian crude to the People’s Republic of China,” per the presidential memorandum.
Iran’s Oil Minister Mohsen Paknejad said this week that unilateral sanctions against major oil-producing countries are threatening global oil and energy market stability and hurting consumers globally.
But the Trump Administration began tightening the screws on the Iranian oil trade with China two days after the “maximum pressure” on Iran was restored.
The U.S. Treasury sanctioned an international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to China.
The oil was shipped on behalf of Iran’s Armed Forces General Staff (AFGS) and its sanctioned front company, Sepehr Energy Jahan Nama Pars (Sepehr Energy), the Department of the Treasury said.
The sanctions designated entities and individuals in multiple jurisdictions, including China, India, and the United Arab Emirates (UAE), as well as several vessels.
“The Iranian regime remains focused on leveraging its oil revenues to fund the development of its nuclear program, to produce its deadly ballistic missiles and unmanned aerial vehicles, and to support its regional terrorist proxy groups,” said Secretary of the Treasury Scott Bessent
“The United States is committed to aggressively targeting any attempt by Iran to secure funding for these malign activities.”
Despite President Trump’s crackdown on Iranian oil exports and 1 million bpd of cheap crude supply to China at risk, oil prices have been trending lower in the past week due to another foreign policy choice of the Trump Administration—the tariff threats and their potential repercussions on global economic growth.
