United States Treasury Secretary Scott Bessent on Monday unveiled a new wave of sanctions – Operation Economic Outcast – targeting nearly 60 entities, people and vessels over Iran trade. The measures broaden secondary sanctions to cover sectors like shipping, gold, aviation, technology and digital assets
Bessent notes the aim was to sever every economic lifeline sustaining the government in Tehran until it stands alone. Though he did not name China directly, his remarks appeared to signal that Washington expects major trading partners, including Beijing, to reduce their economic ties with Tehran.
We break down the depth of Iran-China trade ties and how Beijing has responded to Washington’s pressure. We also examine India-Iran trade relations and the potential impact of the new US sanctions on Indian businesses and on economic ties with Tehran.
Why does China matter to US sanctions?
Quick answers to key questions
What is Operation Economic Outcast and its aim?⌵
Operation Economic Outcast is a U.S. initiative targeting Iran’s financial connections by imposing sanctions on entities involved in its economy, aiming to sever all economic lifelines that sustain the Iranian regime.
Why is China significant in the context of U.S. sanctions on Iran?⌵
China is crucial because it accounts for about 90% of Iran’s oil exports, making it a key player in the success of U.S. sanctions aimed at crippling Iran’s economy.
How have U.S. sanctions affected India-Iran trade relations?⌵
The U.S. sanctions have caused India to halt its Iranian oil imports previously and have now targeted Indian companies for importing petrochemical products, complicating bilateral trade relations.
Should companies doing business with Iran be concerned about U.S. sanctions?⌵
Yes, companies engaging in business with Iran face potential secondary sanctions from the U.S., risking their access to the U.S. financial system.
What actions are being taken against the four sanctioned Indian companies under Operation Economic Outcast?⌵
The four Indian companies have been sanctioned for facilitating the import of petroleum and petrochemical products from Iran, with specific individuals facing legal repercussions due to these transactions.
China is Iran’s biggest buyer of crude, accounting for roughly 90% of the country’s oil exports, according to the US government.
China reported $9.96 billion in bilateral trade with Iran in 2025, excluding the roughly $31.2 billion in unreported Iranian crude oil exports to China that year, according to the U.S.-China Economic and Security Review Commission.
Independent Chinese refiners take in the bulk of it, often rebranded as Malaysian or Indonesian crude and settled through intermediaries outside the dollar system, according to Kpler. Several of these refineries have been sanctioned by the US Treasury this year for buying Iranian oil.
China will be critical to the success of the Operation Economic Outcast to cripple Iran’s economy, given its position as Tehran’s biggest oil buyer. But Washington may struggle to bring Beijing on board, as China continues to defend its economic ties with Iran.
“China’s cooperation with Iran has always been conducted within the international framework and should not be interfered with or undermined,” Chinese Foreign Ministry spokesman Lin Jian said, responding to the US threat. “China is closely monitoring relevant developments and will take all necessary measures to firmly safeguard its own interests.”
India’s Iran trade faces heat
India, once a major buyer of Iranian oil, stopped imports in 2019 after the US imposed sanctions on Tehran. In April, India resumed importing crude oil from Iran following a seven-year halt, after the US temporarily lifted sanctions on Iranian crude exports.
Beyond oil, India and Iran continue to maintain trade ties, with bilateral trade reaching $1.1 billion between April and December 2025. India remains among Iran’s top five trading partners, with New Delhi mainly exporting rice, tea, sugar and pharmaceuticals, while importing dry and fresh fruits from Iran.
Under Operation Economic Outcast, the US again sanctioned four India-based companies for importing petroleum and petrochemical products from Iran.
Among the four “India-based companies” facing action are a customs broker, Portease Partners LLP, and its partners, Indrismiya Ashrafmiya Sheikh and Harish Ramachandra Rangi. They facilitated the import of multiple shipments of Iranian petrochemical products, the State Department said in the release on Monday.
Other Indian companies facing action are Sadashiva Overseas Limited; PP Softtech Private Limited, along with its director Prashant Garg; and Prakrutees Infra Impex Private Limited.
The Indian government has yet to respond to the sanctions.
