The black market for Russian and Iranian oil has encountered an unexpected crisis. Millions of barrels are stuck in storage, deals are stalling, and logistics are faltering. The reason is not only the pressure from US and European sanctions but also a more prosaic factor: too many legal alternatives have appeared on the market at reasonable prices.
This is written by Bloomberg columnist Javier Blas, noting a rare moment when compliance with the rules suddenly became more economically advantageous than circumventing them.
When following the rules is cheaper than breaking them
In the past two months, key buyers of sanctioned oil — India and Turkey — have quietly and without sudden moves started switching to oil not subject to restrictions.
The reason is simple. Discounts on Russian and Iranian oil no longer compensate for the risks: complex payment schemes, shadow fleet, insurance, secondary sanctions. Against this backdrop, legal supplies appear calmer and often more profitable.
The market reacted instantly. Barrels that recently found buyers are now accumulating in tanks.
Russia and Iran face a choice
For Russia and Iran, such a shift means one thing: a possible reduction in production. Otherwise, the excess supply will only grow, increasing pressure on domestic budgets.
But there is a variable that breaks any forecasts.
China as the main factor of uncertainty
This is about China. Today, Beijing buys about 95% of Iran’s oil exports and approximately 60% of Russia’s. This is no longer just trade, but a stable system of mutual dependence.
As Blas notes, the relationships here are symbiotic. Moscow and Tehran sell oil, supporting their military economies. China, in turn, receives energy at reduced prices and powerful political levers of influence — both in the Middle East and in relations with the Kremlin.
It is against this backdrop that analysts increasingly say that Beijing has become the key beneficiary of prolonged conflicts led by authoritarian regimes.
Strategic reserves as a tool of pressure
What Beijing might do next
One scenario is that China compensates for the volumes that India and Turkey refuse by purchasing for strategic reserves. This will allow it to support the exports of Russia and Iran without public gestures, strengthen control over global oil flows, and maintain influence on the price without direct market intervention.
Another option is to refuse additional sanctioned oil and increase the import of legal oil. In this case, Moscow and Tehran will have to cut production, which will almost inevitably push global prices up.
Both scenarios are beneficial to China. The only difference is who will pay for the consequences.
Why this is important for Israel and the region
For Middle Eastern countries, including Israel, what is happening is not an abstract game of numbers. The energy market directly affects regional stability, the budgets of allies, and the ability of dictatorships to finance wars.
NAnews — Israel News | Nikk.Agency has already noted: the longer the gray schemes of oil trade persist, the more resources regimes have that act against the interests of Israel, Ukraine, and the West as a whole.
Conclusion without illusions
China has found itself in a unique position. Its decisions can simultaneously shift oil prices, affect state budgets, and change the political balance in several regions of the world.
This is why Beijing is increasingly seen not just as a buyer but as a strategic player in the global resource market. The wars led by dictatorships become for it not only a source of cheap energy but also a tool for expanding influence — far beyond Asia.