A coordinated military campaign led by the United States and Israel against Iran has escalated multiple times since late February. The recent events have resulted in a significant disruption of about 15% of the global oil supply due to the partial closure of the Strait of Hormuz.
A comprehensive report from The Economist indicates that the U.S.’s strategy of attacking Iran has not yielded the expected outcomes. Despite the conflicts in the Gulf region, Tehran is now generating nearly double the daily revenue from oil sales compared to pre-war levels.
Iran is currently shipping between 2.4 and 2.8 million barrels per day, maintaining a similar output to before the conflict. However, the key factor driving increased profits is the 75% surge in the value of each barrel, expected to reach $104 per barrel in the coming months.
The report highlights that China has emerged as the primary buyer of Iranian oil, accounting for over 90% of the purchases. Previously, smaller refineries used to acquire Iranian oil at discounted rates. With reduced supply from other Gulf nations due to the Strait of Hormuz closure, Iran has been able to raise its prices.
Transactions involving Iranian oil payments are processed through a network of shell companies and “trust accounts” based in China and Hong Kong, utilizing fictitious names to channel money discreetly across various countries to avoid detection.
The report also raises concerns about the utilization of these funds, with oil revenues predominantly flowing to the Islamic Revolutionary Guard Corps (IRGC), deeply entrenched in Iran’s oil sector. Approximately 20 influential figures control access to oil sales, minimizing the likelihood of foreign interference.
Moreover, the military coalition supports oil shipping operations by disabling tracking systems, falsifying locations, and enforcing regulations such as obtaining approval codes from the IRGC before vessels pass through the Strait of Hormuz. In some cases, ships may be required to pay substantial tolls, with individual shipments valued at up to $200 million.
