Better enforcement of the re-imposed snapback sanctions on Iran could have a decisive effect on its oil exports to China.

With the UN “snapback” sanctions back in force, the regime in Tehran finds itself more isolated and under pressure. The measures reinstate the zero enrichment standard and reimpose restrictions on arms transfers, financial transactions, and energy investment. On the financial warfare front, the key question is whether the Trump administration can get China to reduce its oil imports from Iran,

Tehran’s crude exports never disappeared under sanctions, even at the height of the U.S. “maximum pressure” campaign. Data show Tehran, on average, has exported 1.8 million barrels per day (bpd) of oil in 2025 so far. Tehran’s oil exports primarily go to China, with discounts, disguised shipments, and an aging shadow fleet. Unless enforcement focuses on the choke points of maritime transport, refinery intake, and financial clearance, the revived sanctions risk being more symbolic than substantive.

Sanctions alter behavior only when they impose enough costs on key players and infrastructure essential to the targeted trade. The regime in Tehran has mastered the art of sanctions-busting. Legal prohibitions matter little if tankers set sail, refiners process fuel, and banks clear proceeds. A sanctions framework that does not target these nodes will leave Tehran’s revenues largely unaffected.

The required steps are straightforward, practical, and grounded in existing authorities. They should be sequenced to maximize impact.

Protection and Indemnity (P&I) coverage should be contingent on verified documentation, including uninterrupted AIS tracking, validated bills of lading, and clear port histories. Any vessel failing to meet these criteria should lose recognition from the International Group (IG) of P&I Clubs, which remains the only form of liability cover broadly accepted at major ports and by global refiners. Non-IG alternatives, such as state or regional insurers, can operate only when ports explicitly allow them, as shown by India’s limited approvals for Russian insurers earlier this year.

That precedent demonstrates that the point of enforcement is not the issuance of insurance itself but the willingness of ports and refiners to honor it. Effective sanctions would therefore require three linked actions: IG clubs withdrawing coverage for deceptive vessels, port-state control denying entry to uninsured ships, and refiners refusing to offload cargoes without IG liability certificates. The consistent application of these rules would reduce the usable fleet, increase transaction costs, and force Iran to offer deeper discounts to place cargoes.

The shadow fleet consists mainly of vessels older than twenty years, which are frequently reflagged and class-hopped. Under existing maritime conventions, port-state control authorities can detain such ships on the grounds of safety. Prioritizing Iranian-linked tankers for inspection will accelerate detentions, trigger classification withdrawals, and prompt the scrapping of unsafe hulls. This reduces capacity over time without requiring new mandates.

When sanctions targeted a Chinese Haiye Dongjiakou terminal earlier this year, shipments were diverted to nearby ports such as Huangdao, creating delays and widening discounts for Iranian cargoes. Additional reportingindicates that direct sanctions on two Shandong refiners prompted the provincial port group to reject their cargoes, forcing tankers to divert to smaller facilities. Institutionalizing and expanding this approach through a rolling list of terminals and refineries repeatedly linked to deceptive cargoes would constrain outlets and raise costs. Evidence-based designation ensures precision while minimizing disruption to legitimate flows.

Tehran launders proceed through networks of shell firms and exchange houses. Designations alone cannot keep pace. Regular advisories from the US Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) should identify both entities and typologies, enabling global banks to rapidly exit exposure. This forces Tehran to rely on riskier and more costly channels.

Tehran relies on a network of trusted operatives to manage front companies that transfer oil and launder money. The sanctions against these front companies must target the board members, C-level and other executives, and major shareholders. The goal should be to minimize the pool of suitable candidates that Tehran can utilize in its illicit financial operations.

Together, these measures exploit the structural weaknesses of Iran’s oil trade. Insurance and port requirements shrink the usable fleet. Terminal accountability narrows buyers. Financial transparency accelerates the withdrawal of facilitators. Sequenced correctly, they raise costs and reduce netbacks even if some volumes still move.

The results can be tracked against measurable benchmarks within defined timelines. Within months of rigorous enforcement, exports should drop to their average of 800,000 bpd during the maximum pressure campaign, while the discount Tehran offers should widen. The number of Iranian-linked tankers detained, de-flagged, or scrapped should rise quarter by quarter. Throughput at sanctioned terminals should fall consistently. These metrics provide policymakers with an objective scorecard to assess whether pressure is eroding Tehran’s revenues.

Snapback creates law but not leverage. Tehran has already learned that appearances can substitute for pressure when enforcement is neglected. If governments settle for declarations, Iran will continue to monetize exports and finance its regional activities. If, instead, the principle of enforcement is applied consistently, the regime’s revenues will contract. The distinction between symbolism and substance will determine whether snapback sanctions contribute to strategic pressure or become another exercise in rhetorical posturing.

About the Authors: Aidin Panahi and Saeed Ghasseminejad

Dr. Aidin Panahi is an energy and industrial policy expert. 

Dr. Saeed Ghasseminejad is a senior advisor at the Foundation for Defense of Democracies, specializing in Iranian finance and sanctions.