How China’s “Teapot” Refineries Became Iran’s Lifeline

China’s so-called “teapot” refiners, small, privately run oil processors operating outside the country’s state-owned energy giants, have evolved into a critical link in Iran’s oil trade.

According to the Wall Street Journal, these refiners now absorb the vast majority of Iran’s exported crude, providing Tehran with a steady flow of revenue despite ongoing U.S. sanctions.

Originally small and loosely regulated, teapot refiners expanded rapidly by purchasing discounted crude from sanctioned producers such as Iran, Russia, and Venezuela.

This strategy allowed them to secure cheaper supply while helping countries like Iran maintain export volumes under pressure.

Data from Kpler shows that China accounted for more than 80% of Iran’s oil exports in 2025, underscoring the scale of this relationship.

The U.S. has responded by targeting these refiners with sanctions aimed at restricting access to the American financial system and discouraging global partners from engaging with them.

Beijing, however, has pushed back, rejecting the measures and framing them as violations of international law.