Reuters investigation reveals oil-credit channel sustaining China-Iran trade

Trade without a conventional payment chain

Iran has used a barter-like arrangement to turn oil sales into credits for Chinese imports, according to a Reuters investigation published on September 10. Five people familiar with the mechanism described a structure designed to keep Iranian purchases moving while reducing the exposure of exporters, banks and intermediaries to international scrutiny. The reported channel has funded civilian goods and, in at least one case, contracts connected to air-defence equipment.

Under the arrangement described by Reuters, a buyer working for Chinese state-owned oil trader Zhuhai Zhenrong deposited money with a little-known China-based entity identified as ChuXin. Funds were then directed toward exporters and infrastructure work in Iran, while a separate special-purpose vehicle paid suppliers after authorisation from Iran’s central bank. Reuters found no public corporate registration for ChuXin and could not independently authenticate every document or alleged transaction.

Billions routed outside normal banking channels

Sources estimated that between $2 billion and $2.5 billion moved through the special-purpose vehicle during the preceding year. They said the mechanism had been operating since at least 2021 and initially supported purchases including medicines and COVID-19 vaccines. It later covered vehicles, communications equipment and infrastructure, with part of the money reportedly linked to Iranian air-defence contracts worth millions of dollars.

The investigation did not establish that the Chinese manufacturers receiving payments knowingly violated sanctions. The structure instead appeared to separate suppliers from direct Iranian payments and conventional cross-border banking. China’s foreign ministry said it was unfamiliar with the arrangement described by Reuters and reiterated its opposition to unilateral sanctions. Iranian missions did not respond, while several named companies and institutions also gave no response.

Washington’s pressure campaign

The report provides new detail on the challenge facing the United States as it tries to isolate Iran economically. On August 24, the White House announced Operation Economic Outcast, broadening pressure on Iranian activity involving shipping, aviation, technology, digital assets and gold. The official release said the campaign sought to sever Iran’s remaining financial connections and warned foreign partners about continued dealings with Tehran.

China’s importance makes enforcement especially consequential. Reuters cited shipping data indicating that China bought more than four-fifths of Iran’s shipped oil in 2025. Severe measures against major Chinese financial institutions could therefore affect both Iranian revenue and the wider global economy. What remains unclear is how the reported credit mechanism has functioned since the renewed naval blockade restricted Iranian cargo movements through the Strait of Hormuz.

What to watch next

The central questions are whether Washington identifies the special-purpose vehicle or its intermediaries for sanctions, whether Beijing investigates the alleged structure, and whether oil movements resume at sufficient scale to replenish the credits. The investigation establishes a reported mechanism and supporting testimony, not a judicial finding. Its significance lies in showing how bilateral trade can persist through layered intermediaries even when conventional banking access is restricted.