President Donald Trump’s latest pronouncement threatens to reshape global energy markets and diplomatic relations by invoking secondary sanctions against any nation or entity that imports Iranian crude oil or petrochemical products. Through a post on Truth Social, Trump declared that “all purchases of Iranian Oil, or Petrochemical products, must stop, NOW! Any Country or person who buys ANY AMOUNT of OIL or PETROCHEMICALS from Iran will be subject to, immediately, Secondary Sanctions.” This bold move underscores secondary sanctions as a central instrument in the Trump administration’s strategy to halt Iran’s nuclear ambitions and apply maximum economic pressure.

Secondary Sanctions: Trump’s Move Against Iran Oil Trade

The concept of secondary sanctions empowers the United States to penalize not only the targeted country—in this case, Iran—but also third-party actors that engage in trade with that target. Under the International Emergency Economic Powers Act (IEEPA) and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), secondary sanctions can restrict access to the U.S. financial system, bar visas, and prohibit transactions with U.S. persons and entities. This mechanism has become a linchpin of U.S. foreign policy, allowing Washington to extend its reach beyond its own borders to influence international commerce.

America’s reliance on secondary sanctions grew markedly during the Obama administration’s “maximum pressure” campaign following the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018. The Trump administration expanded that effort, targeting Iran’s oil exports—the lifeblood of its economy—to force Tehran back to the negotiating table with harsher terms or, failing that, to bankrupt its nuclear and missile programs.

Geopolitical Stakes in U.S.-Iran Relations

Escalating secondary sanctions on Iranian oil imports is more than an economic weapon; it is a high-stakes diplomatic gambit. The United States seeks to sever Iran’s principal source of revenue—oil sales—that fund the Islamic Revolutionary Guard Corps (IRGC) and regional proxy networks across the Middle East. By threatening any nation that continues purchasing Iranian crude with financial isolation, the administration aims to deprive Iran of roughly $30 billion in annual oil revenues.

At the same time, the move complicates ongoing negotiations to curb Iran’s nuclear program. Trump has dispatched special envoy Steve Witkoff and senior State Department official Michael Anton to discussions in Vienna, with the administration offering to lift certain sanctions only if Iran agrees to verifiable caps on uranium enrichment and permanent inspections. Iran, however, insists on the unconditional removal of all sanctions—a stance reiterated by Foreign Minister Abbas Araghchi when he announced the postponement of the fourth round of U.S.-Iran talks “for technical and logistical reasons.” Araghchi emphasized that Iran remains “more determined than ever to achieve a just and balanced deal: guaranteeing an end to sanctions, and creating confidence that Iran’s nuclear program will forever remain peaceful while ensuring that Iranian rights are fully respected.”

Impact on China’s Oil Imports and Global Markets

China, the world’s largest importer of Iranian crude, has been thrust into the geopolitical crossfire. According to data from Vortexa, China’s Iranian oil imports reached a record 1.8 million barrels per day in March 2025, up from 1.1 million bpd a year earlier. These volumes account for roughly 20 percent of China’s total crude consumption. Any threat of secondary sanctions jeopardizes China’s energy security and could force Beijing to seek alternative suppliers in the Middle East, such as Saudi Arabia and the United Arab Emirates, or to accelerate purchases from Russia.

However, China has shown a willingness to call Washington’s bluff. Beijing has rebuffed Trump’s repeated calls to open bilateral trade talks and has deepened cooperation with European partners seeking to preserve Iran’s nuclear deal. The European Union, in particular, has explored mechanisms like INSTEX (Instrument in Support of Trade Exchanges) to facilitate humanitarian trade with Iran, partially insulating Tehran from U.S. sanctions. Should China choose to defy secondary sanctions, it risks limited access to U.S. financial institutions, restrictions on its state-owned enterprises, and potential visa bans on key officials—punishments that could strain Sino-American relations further.

Legal Framework for Secondary Sanctions

Secondary sanctions derive their authority from several statutes and executive orders. Key among them is IEEPA (50 U.S.C. § 1701 et seq.), which grants the President broad powers to regulate commerce after declaring a national emergency. Executive Order 13846, issued in August 2018, specifically targeted Iran’s petroleum sector, authorizing OFAC to sanction foreign financial institutions that facilitate significant transactions for the Iranian energy sector. Violations can result in the blocking of assets, prohibitions on U.S. bank correspondent relationships, and fines of up to $250,000 per violation per day.

Scholars such as Professor Curtis Bradley of Duke University have noted secondary sanctions’ extraterritorial reach raises questions under international law and the sovereignty of third states. Critics argue that this overreach undermines norms of free trade and foreign sovereignty, prompting retaliatory measures by allies. Nonetheless, past applications—against Iran, North Korea, and Venezuela—demonstrate Washington’s capacity to coerce compliance through economic strangulation.

Reactions from Tehran, Beijing, and Brussels

Tehran’s Response
Iranian leaders have denounced Trump’s latest threat as “unlawful coercion.” Supreme Leader Ayatollah Ali Khamenei warned that Iran would “pursue its nuclear and missile programs without hesitation” and vowed “countermeasures” if sanctions impede Tehran’s oil sales. Meanwhile, President Ebrahim Raisi’s administration is said to be exploring barter arrangements—offering petrochemicals and refined products in exchange for essential goods—and expanding oil-for-goods deals with China and India to mitigate revenue losses.

Beijing’s Calculus
While reluctant to openly defy Washington, Chinese state-owned oil companies have reportedly continued spot purchases of Iranian crude through middlemen and barter schemes, making it harder for U.S. intelligence to track transactions. Chinese Foreign Minister Wang Yi has called for “an immediate end to unilateral sanctions” and urged “all parties to act with restraint and uphold multilateralism.” Yet, China must weigh the cost of potential U.S. financial reprisals against the imperative of meeting its domestic energy needs.

EU’s Balancing Act
European leaders have criticized the extraterritorial impact of U.S. secondary sanctions. EU High Representative Josep Borrell reiterated that the bloc “stands ready to protect European companies legitimately trading with Iran,” invoking the 1996 EU Blocking Statute that nullifies U.S. measures within EU jurisdiction. Nevertheless, few major European banks or corporations are willing to face secondary sanctions, limiting Brussels’ capacity to shield Iran from U.S. pressure.

Historical Precedents and Effectiveness

Secondary sanctions first gained prominence under the George W. Bush administration’s pursuit of a nuclear deal with North Korea in 2003, blocking Chinese and Russian entities that financed WMD proliferation. Under President Obama, secondary sanctions on Iran in 2012–2013 successfully drove Iranian crude exports down from 2.5 million bpd to below 1 million bpd, contributing to Tehran’s decision to negotiate the 2015 JCPOA. However, the Trump administration’s decision to exit the JCPOA in 2018 and reimpose sanctions marked a departure, as Iran resumed uranium enrichment beyond JCPOA limits.

While secondary sanctions have proven effective in curbing target-state revenues, they can also foster “sanctions fatigue” among allies and drive sanctioned states closer to non-U.S. partners. For instance, Russia’s deepening ties with Iran after 2018 illustrate how sanctions can backfire by strengthening rival alliances.

Potential Scenarios and Market Outlook

Scenario 1: Broad Compliance and Oil Price Surge
If major importers—China, India, Turkey—heed Trump’s warning, Iranian exports could plummet below 500,000 bpd, tightening global supplies and driving Brent crude prices past $90 per barrel. OPEC+ would face pressure to boost output, but production constraints in Venezuela and Libya limit spare capacity.

Scenario 2: Partial Defiance and Gray-Market Trade
Importers may continue limited purchases through intermediaries, reducing transparency but maintaining flows at 1 million bpd. This scenario would prolong market uncertainty, with prices stabilizing around $75–80 per barrel, and undermine U.S. sanctions enforcement credibility.

Scenario 3: Widespread Defiance and Diplomacy Reset
China and the EU could jointly challenge U.S. overreach via World Trade Organization (WTO) complaints, forcing Washington to negotiate carve-outs or risk isolating itself from allies. A diplomatic compromise might emerge, paralleling the 2015 JCPOA, with phased sanctions relief tied to stricter, longer-term Iranian nuclear constraints.

Conclusion

President Trump’s threat to impose secondary sanctions on any country or person purchasing Iranian oil marks a significant escalation in U.S. economic statecraft. By leveraging the tentacles of the American financial system, Washington aims to strangle Iran’s oil revenue and coerce Tehran into more stringent nuclear concessions. Yet the move risks alienating key partners, driving importers into gray-market channels, and prompting legal challenges under international trade law. As global energy markets brace for potential supply disruptions and diplomatic tensions rise, the effectiveness of secondary sanctions will hinge on allied compliance, enforcement rigor, and Iran’s resilience through alternative trading mechanisms.

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Related Links

• U.S. Department of the Treasury, OFAC Sanctions Program
• Vortexa Iran Oil Import Data, March 2025
• Joint Comprehensive Plan of Action (JCPOA) Full Text
• Truth Social Post by President Trump (May 1, 2025)

Other FinCrime Central News About Iran Being Hit By US Sanctions

• Iran and US Sanctions: Treasury Targets Key LPG Magnate
• U.S. Treasury Cranks Up Sanctions on Chinese Importers of Iranian Oil
• U.S. Treasury Sanctions Key Enablers of Iran’s Nuclear Program
• U.S. Takes Strong Action Against Iran’s UAV Procurement Network Amid Ongoing Sanctions Evasion

Source: Politico, by Gregory Svirnovskiy