- Billions of dollars linked to Iran still flow through US banks despite 2024 sanctions
- Iranian funds enter US banks through foreign banks with American correspondents
- China buys over 80% of Iranian oil, importing 500,000 barrels daily in August 2024
Billions of dollars linked to Iran are still passing through US banks every year, even though Washington has put strict sanctions against Tehran, according to a new report.
Iranian funds can enter the US banking system indirectly through foreign banks that have correspondent relationships with American lenders, The Wall Street Journal reported. The US Treasury identified around $9 billion in Iranian funds that moved through US banks in 2024, according to the investigation.
This Iranian money can be routed through foreign financial institutions, shell companies and currency exchanges.
This comes at a time when the Trump administration has stepped up sanctions against Iran. It has warned companies and countries that doing business with Tehran could lead to them being cut off from the US banking system.
Iran is trying various ways to keep its money flowing. Its oil industry remains the country's biggest source of income. Although US pressure has restricted Iranian oil exports, Tehran still has large amounts of crude stored on tankers. Much of the oil is kept in waters around Asia, particularly near Malaysia.
China is Iran's biggest oil customer and accounts for more than 80% of its exports. Kpler data cited by the WSJ showed that China imported more than 500,000 barrels of Iranian oil a day in August.
Iran can also make it harder to identify where its oil comes from by transferring crude between ships at sea. Oil from sanctioned tankers can be moved to other vessels before reaching China, where it may be recorded as coming from another source.
Vortexa estimates that about 80 million barrels of Iranian crude are currently being held in floating storage in Asian waters. The oil could be worth billions of dollars to Tehran.
Iran has also reduced its dependence on the US dollar in its trade with China. Iranian oil deals with Chinese buyers are being settled in Chinese yuan instead of dollars. Iran can use the yuan to buy Chinese goods and services. In some cases, oil can also be exchanged for Chinese companies carrying out infrastructure projects in Iran.
Iran has also turned to cryptocurrency. Researchers cited by the WSJ said Iran has used billions of dollars in cryptocurrency for trade and to get weapons and other goods. The Islamic Revolutionary Guard Corps (IRGC) has also used crypto exchanges to receive payments for oil, including from Chinese buyers.
However, Iran still needs US currency and other major currencies to pay for imports, buy military equipment and support regional allies, according to Western officials cited in the report. For this, Tehran has developed networks of shell companies and exchange houses in financial centres such as Hong Kong and Dubai.
These businesses can help convert Iranian oil earnings and other export income into dollars, euros and UAE dirhams while hiding the money's connection to Iran.
The US Treasury is trying to stop Iranian money from entering the international financial system by imposing sanctions on banks and companies. But stopping one bank or company does not stop the entire network.
