Iran International
US sanctions are squeezing Iran’s economy but also enriching Tehran elites and deepening ties to China, Mideast and energy expert Gregory Brew told Iran International’s Eye for Iran podcast.
Brew said sanctions continue to hurt, yet no longer have the power to change behavior.
“Sanctions have had an impact, there’s no question,” he said. “But the idea that they can be used to change state behavior… I think that age is coming to an end.”
He described a global oil market now split in two. Alongside the legal, dollar-based system, a small handful of heavily sanctioned exporters—Iran, Russia and Venezuela—accounts for more than 10 percent of global production and holds over a third of the world’s proven reserves.
Much of that trade runs through China, sustained by barter-style deals, deferred contracts and non-dollar payments that keep Iranian crude flowing but eat into returns.
A recent Wall Street Journal investigation found that Beijing has been funnelling billions to Tehran through non-cash arrangements, offsetting payments against goods and services — evidence, Brew said, of how sophisticated the workaround economy has become.
Slipping sanctions dragnet
Enforcement, Brew said, has become a game of cat and mouse with the US Treasury’s Office of Foreign Assets Control (OFAC), which oversees and enforces sanctions.
“The officers in OFAC know what they’re doing,” he said, “but the problem is resources.” “By the time the sanctions have been drafted, reviewed, announced and implemented, those who are involved in the trade will shut down operations and move somewhere else.”
Tankers and front companies routinely reflag, rename or falsify locations to stay ahead of sanctions. Contracts are passed through layers of brokers across the Persian Gulf, Hong Kong, and Malaysia.
Even when OFAC catches up, others take their place. On the Chinese side, Brew said, the reaction is often indifference.
“If there are Chinese businessmen who learned they’ve been sanctioned by OFAC, they say, okay, that’s something … They don’t care because they don’t do business in dollars.”
Pressure profiteers
Brew emphasized that the pressure inside Iran is real: inflation, a collapsing currency, shrinking purchasing power and stalled foreign investment.
Yet the same sanctions have also produced a class of insiders who profit from them.
Politically connected intermediaries and security-linked firms have turned sanctions into a business model, giving them every reason to keep the restrictions in place.
The case of Babak Zanjani—an Iranian oligarch accused of withholding billions in oil revenue—remains a symbol of how power and profit merged in the sanctions era.
GPS off
How the oil moves tells its own story.
Tankers load crude at Karg Island, transfer it between ships in the Persian Gulf or Southeast Asia, switch off tracking systems, change names and flags and eventually offload at ports in China’s Shandong province.
Some cargoes sit in “floating storage” for weeks while contracts and cover stories are arranged.
On paper, the oil often appears to come from Malaysia or the United Arab Emirates.
The financial trail is even harder to trace, routed through brokers in Hong Kong, the Gulf, and mainland China, and sometimes settled through goods, services, or investments rather than money.
An Iran International investigation this week revealed that Iran's Islamic Revolutionary Guard Corps and Armed Forces General Staff have sought Chinese weapons as payment for oil.
The limit of sanctions
Brew said sanctions now serve to contain Iran rather than transform it.
The sanctions still cut off hard currency and investment and have left the country reliant on one customer—China—but they no longer deliver the political results Washington once hoped for.
The United States can still weaken Iran, he said, but not change it. “Sanctions keep Iran in a box,” Brew said. “They work to contain, not to transform.”
You can watch the full episode of Eye for Iran on YouTube or listen on any podcast platform of your choosing like Castbox, Spotify, Apple or Amazon Music.
