The push for Bessent Iran economic isolation faces a central obstacle: almost every remaining pressure point risks damaging US economic interests or inflaming the standoff with Beijing.
That is the verdict of Bloomberg Economics analyst Chris Kennedy, who said that unless the White House treats the Iran threat as its overriding priority above China, “it’s unlikely any action they take is going to materially change Iran’s calculus.”
China’s grip on Iranian oil exports
China buys more than 90% of Iran’s oil exports, making Beijing’s behaviour the decisive variable in any isolation strategy. CM Trade Law puts China’s share at 89% of all Iranian oil sales, with the remainder going to Syria, the UAE and Venezuela.
The scale of that dependency is underscored by output data. Iranian petroleum exports reportedly hit a record in the first quarter of 2024, with “almost all” going to China, according to the Congressional Research Service, and they remained high into early 2025 despite some reported disruptions.
Washington has already sanctioned some Chinese teapot refineries since the US began its pressure campaign against Iran in late February, but has stopped short of targeting the major Chinese banks that finance the trade.
Hitting those banks would directly reduce Tehran’s oil revenues. The risk is that doing so could worsen tensions with Beijing ahead of a planned meeting between President Donald Trump and Chinese leader Xi Jinping. There is also a market consequence: removing discounted Iranian crude would lift already elevated global oil prices.
In May, China ordered domestic companies not to comply with US sanctions on five refiners, while its biggest banks were caught between Beijing’s directive and the risk of losing access to the US financial system.
Exchange houses, shadow fleets and overseas assets
Once Iran makes its oil sales, it needs exchange houses and intermediaries to convert payments, often received in Chinese yuan, into usable currencies. US Treasury has already sanctioned some Iranian exchange houses as part of what it calls the “Economic Fury” campaign, accusing them of helping launder billions of dollars in foreign currency.
Cutting off individual exchange houses will likely push transactions toward new intermediaries, currencies or digital assets rather than stopping them altogether. Iran has spent years building alternative channels outside the formal financial system.
A broader option would be secondary sanctions threatening any entity doing even limited business with Iran, similar to the approach Trump took toward North Korea in 2017. That would force foreign companies and banks to choose between Tehran and access to the US financial system, putting pressure on Russia and China but also on US partners such as Turkey that maintain significant commercial ties with Iran.
Trump has already floated a version of this, threatening 25% tariffs on countries conducting business with Iran. He has not yet followed through.
On assets, the US could go beyond freezing Iranian government funds and attempt to confiscate assets already under US jurisdiction, drawing on a step the Bush administration took after the 2003 invasion of Iraq. The pool of Iranian state assets within direct US reach may be limited, however, and confiscation would be legally and diplomatically more complicated than a freeze. Much of Iran’s overseas wealth sits in third countries, requiring foreign government cooperation to seize.
Washington could also expand its naval pressure on Iran’s so-called shadow fleet, targeting not just individual vessels but also the companies, terminals and infrastructure that enable those shipments.
Officials could combine several of these measures or pursue a different approach altogether. The administration has not yet indicated which, if any, it will adopt.
