Trump Allows China to Keep Buying Iranian Oil, Changing the Global Oil Market

On June 24, 2025, U.S. President Donald Trump said that China can keep buying oil from Iran. He made this statement while heading to a NATO meeting, signaling a major change in U.S. policy.

Trump also said he does not want to force a new government in Iran, warning that such a move would only create more chaos.This news comes after a tense period in the Middle East.

Israel and Iran had recently broken a ceasefire, and the U.S. had launched airstrikes on Iranian nuclear sites. After talks, Israel agreed to stop attacking Iran, at least for now.

Trump’s announcement had an immediate effect on oil prices. The price of Brent crude oil dropped by more than 4%, landing at $68.15 per barrel. U.S. crude oil also fell to $65.33 per barrel.

These drops happened because traders no longer feared that Iran might block the Strait of Hormuz, a key route for global oil shipments. About 20% of the world’s oil passes through this narrow waterway, making it vital for many countries.

China is Iran’s main oil customer. In March 2025, China bought between 1.67 and 1.8 million barrels of Iranian oil each day. This made up about 16% of China’s oil imports by sea. Nearly 90% of Iran’s oil exports now go to China.

This trade continues despite U.S. sanctions, which have tried to stop countries from buying Iranian oil. The U.S. even sanctioned some Chinese oil companies, but China still buys Iranian oil at a discount.

Iranian oil is cheaper for Chinese buyers, selling for $3.30 to $3.50 less per barrel than the global price. This makes it attractive, especially when global prices are unstable.

In March, oil storage in China’s Shandong province grew by 22 million barrels, a record increase, as refineries stocked up. Trump’s decision is a big change from his earlier policy, which aimed to cut Iran’s oil exports sharply.

The U.S. still tries to sanction companies trading Iranian oil, but it is hard to enforce these rules. China opposes such sanctions and wants to keep its energy supplies steady and affordable.