Iran has used a barter-like arrangement in which oil is exchanged for credits to buy Chinese goods, helping Tehran bypass international banking channels and sanctions. The mechanism supported purchases of medicines, vehicles, communication equipment and, at least once in the past year, air-defense equipment contracts worth millions of dollars. Sources estimated that $2 billion to $2.5 billion flowed through a special purpose vehicle (ring-fenced payment vehicle) over the last year. China, which accounted for more than 80% of Iran’s shipped oil in 2025, or an average 1.4 million barrels per day, has retained access to discounted crude while limiting direct exposure for Chinese banks and exporters. Reuters could not independently verify the alleged transactions or determine how the U.S. naval blockade, reinstated on July 14, affected the arrangement. No Iranian crude cargoes have successfully transited the Strait of Hormuz to China since then, Reuters reported last week.