US Treasury Secretary Scott Bessent issued a stern warning on Monday, vowing an “economic D-Day” for nations that continue to purchase oil from Iran. While Bessent did not explicitly name China during his announcement, he made it clear that the administration is targeting the primary financiers of Iran’s government budget and military activities. “We know who they are. They know who they are,” Bessent stated, emphasizing that the administration is currently engaging in quiet diplomacy to set expectations with relevant nations.
Data indicates that China remains the largest consumer of Iranian energy, with the U.S.-China Economic and Security Review Commission reporting that Chinese purchases account for approximately 90 percent of Iran’s oil exports. This trade provides Tehran with tens of billions of dollars in annual revenue. One analysis estimated that Iran shipped between $3.9 billion and $4.2 billion worth of oil in September 2025 alone. Although Monday’s announcement served as a “warning shot” without immediate broad sanctions, Bessent cautioned that “no one is above the reach of US sanctions” and noted that the administration does not have “infinite patience.”
The Chinese government responded swiftly to the threat. Foreign Ministry spokesman Lin Jian stated that sanctions and pressure tactics are ineffective and only serve to escalate tensions. He further indicated that China is monitoring the situation closely and is prepared to take necessary measures to protect its rights and interests. Tensions between the two nations remain high, following a period of intense trade disputes and reciprocal sanctions.
The potential for new sanctions comes as global energy markets remain sensitive to the ongoing conflict. According to a Nomura report from April, 38 percent of China’s oil and 23 percent of its liquified natural gas pass through the Strait of Hormuz. While China has already reduced its intake of Iranian crude—dropping from roughly 1.4 million barrels per day before the conflict to about 700,000 barrels recently—analysts suggest a total halt would have a limited immediate impact on China due to existing large inventories.
Tracking the actual volume of oil leaving the region remains a challenge. While US Energy Secretary Chris Wright has maintained that the Strait of Hormuz remains open, third-party data suggests significantly lower flow volumes than official claims. Furthermore, the rise of “shadow fleets”—tankers that obscure their ownership and destination—has complicated enforcement. Ship-tracking platform Kpler reported that shadow transit accounted for roughly 50 percent of traffic in the strait in recent weeks, a sharp increase from 12.5 percent just a month prior.
The broader economic impact of these sanctions could extend to American consumers. The national average price for gasoline currently sits at $4.10 a gallon, up from $3.15 last year. The global market has relied on large oil reserves to prevent a severe shortage since the conflict began in February, with prices fluctuating based on the status of periodic ceasefires. As the administration weighs its next steps, including potential new measures, the diplomatic landscape remains complex, particularly with Chinese leader Xi Jinping expected to visit the United States next month.
Historical precedent shows that such sanctions can shift trade patterns significantly. India, once a major importer of Iranian oil, ceased those imports in 2019 due to US pressure, though it maintained a $1.1 billion trade relationship with Iran for other goods like rice and sugar between April and December 2025. Whether similar pressure will force a shift in Beijing’s policy remains a critical question for the administration’s foreign policy strategy. The report also notes that “We find that the best way to engage with countries is through quiet diplomacy, and we are level-setting with every country to tell them our expectations,” Bessent said on Monday. The report also notes that “China, by far, is the most impactful one if you really wanted to make a dent in Iran’s ability to continue to finance their activities,” Daniel Tannebaum, a nonresident senior fellow at the Atlantic Council, previously. The report also notes that experts say that means one country in particular: China. The report also notes that but he left little room for doubt, bessent didn’t name China on Monday. The report also notes that he did not announce broad measures aimed at any specific nations, while some entities and individuals were sanctioned. The report also notes that they will only lead to escalation that serves no one’s interest.”.