Sky News report
In a discreet, once-rural region of China, there is an industry with an outsized role and marked by secretive dealings.
In the north of Shandong province, So-called “teapot” refineries are multiplying.
There are dozens of independent and small units, so named for their ancient compact shape. These refineries buy oil at low cost from different suppliers and sell it locally, in a system that allows you to circumvent international sanctions and keep China’s allies economically supportednamely Iran.
More than 80% of Iranian oil, a sanctioned product that few countries accept, is acquired by these refineries. It is an essential source of financing for the Iranian regime and the war effort.
Local workers like Gao Ri may not know for sure where the oil comes from, but recognize that it continues to arrive in Chinacontrary to what happens in much of the world.
“There are countries under pressure, but there is no way to pressure China. We have more than enough,” said the worker, underlining confidence in the country’s capacity.
Despite the impact of the war, the worker considers that the situation does not represent a direct threat.
“It shouldn’t be a problem. China is number one,” he assured.
The war has caused oil shortages and rising prices in many parts of Asia, but Iran continues to guarantee supplies to China, bolstering its energy security.
Outside of the large refineries, the region maintains a modest and even somewhat degraded appearance, which contrasts with its strategic importance. This territory is crucial to both Iran’s economic survival and China’s energy security.
Still, there are risks. These refineries operate with very low margins and any interruption in supply can have serious consequences. Even there, prices are already rising.
In a small roadside truck parts business, a trader describes the difficulties:
“There are few customers. Business is worse than during the pandemic.”
“When the US sanctions China, things don’t go well. The economy gets worse,” added another.
China therefore has a direct interest in stability. Donald Trump said he believed it was Beijing that pressured Iran to negotiate, although doubts persist about the extent to which it supported the ally.
Asked about the use of these refineries to trade sanctioned Iranian oil, The Chinese Government rejects the accusations.
“The main cause of the impact on the world economy and energy security is the conflict with Iran. China firmly opposes illegal unilateral sanctions that have no basis in international law,” a spokesperson said.
Despite not officially recognizing it, this system has been essential to Iran’s survival. At the same time, reinforces China’s geopolitical position, ensuring internal protection and expanding its external influence.
