What is Trump’s “maximum pressure policy” that could lead to higher import costs for China’s Iranian oil?

US President-elect Donald Trump’s return to power could mean renewed restrictions on China’s access to discounted Iranian oil, which accounts for about 13% of its oil imports.
Donald Trump is expected to reimpose his “maximum pressure policy” on Iran’s oil industry over nuclear issues, according to Iranian, Arab and Western officials.
If sanctions tighten, China could face rising oil prices, which would impact its refining industry, especially independent refiners, which are already struggling due to weak fuel demand and declining profits.
Vivek Dhar, commodities strategist at Commonwealth Bank of Australia, said: “A Trump victory could lead to the United States tightening sanctions on Iran, thereby reducing Iranian oil exports and causing oil prices to rise.”
During Trump’s previous term, sanctions led to a significant decline in Iranian oil exports to major markets such as India, Japan and South Korea. Since 2019, however, smaller Chinese refineries have become buyers of cheaper Iranian oil, taking advantage of the gap left by larger state-owned companies wary of U.S. restrictions. The strategic move saved China billions while cementing its role as a major oil market for Tehran.
Iran and China have built a trading network relying on the yuan and intermediaries to avoid U.S. financial controls, making it difficult for Washington to strictly enforce sanctions.
However, with Trump’s return, the possibility of tougher measures remains possible. In recent months, the U.S. has expanded sanctions targeting “dark fleet” vessels that carry Iranian oil, slowing supplies to China from transshipment hubs such as Malaysia, according to the manager of an independent refinery that handles Iranian oil. “Even ship-to-ship (STS) operations may be affected. So the concern is more about shipping than banking,” he said.
Despite these challenges, China’s Iranian oil imports rose about 30% between January and October, driven largely by dark fleet operations, Vortexa analyst Emma Lee noted. “We will only see significant changes when other players, such as banks, are added to the list,” Lee commented.
Iranian oil often finds its way to China through middlemen who rename the crude to Malaysia, Oman or other countries to circumvent U.S. sanctions. While Washington is considering tougher sanctions, analysts are taking a cautious approach, especially given the challenges to global oil supplies following the conflict in Ukraine. Beijing continues to justify its trade with Iran, saying it complies with international law.

Trump’s “maximum pressure policy” is a comprehensive strategy aimed at dismantling Iran’s nuclear program, curbing its support for militant groups and reducing its influence in the Middle East. The policy was aimed at achieving these goals through harsh economic sanctions, effectively blocking Iran’s access to global financial systems and reducing its oil export revenues. This approach was aimed at forcing Iran to renegotiate the nuclear deal on US terms or even to cease its nuclear activities altogether.
Following the US withdrawal from the Iran nuclear deal (JCPOA) in 2018, Trump reimposed sanctions, cutting Iran off from international oil markets. The sanctions extended to sectors such as metal exports, banking and Iran’s central bank, freezing assets held abroad. This rapid economic isolation caused Iran’s oil exports to plummet, leading to severe economic consequences within the country.

As traditional buyers such as Japan and South Korea retreated fearing US sanctions, China stepped in, cashing in on depressed Iranian oil. Small independent refineries in China have begun purchasing Iranian oil through intermediaries, concealing its origins to circumvent US sanctions. This workaround has allowed China to benefit from cheap oil, although it remains a source of tension with Washington.