"*" indicates required fields

Subscribe

This field is for validation purposes and should be left unchanged.

By subscribing you agree to our Privacy Policy

Subscription Settings
Analysis

On the Perils of “Oil-for-Services” Barter Deals With China

The March 19 edition of the Iran Media Review focuses on the debate over Iran bartering its oil for construction services to bypass U.S. sanctions.

Ali Alfoneh

3 min read

In public commentary on the impact of the U.S. sanctions regime, Iranian officials shift between the two extremes, claiming the sanctions have no impact or exaggerating the impact of those same sanctions. As a remedy to bypass sanctions, particularly financial sector sanctions, which prevent Iran from receiving payment for its oil exports, Iran has at times used bartering, creating other problems.

  • March 17: Reformist Shargh newspaper, quoting Iranian experts, discussed the perils of “oil-for-services” deals with China:
    • Shargh’s anonymous columnist wrote: “Bartering oil for housing and sports stadium projects, along with expansion of the Imam Airport, is widely criticized by experts … Since September 2023, rumors have circulated about the Chinese bartering constructing housing” in Iran “for Iran’s oil, although the news has at times been dismissed and at other times confirmed by different officials … On November 25, 2023, Fars News Agency further reported that a Chinese company, in cooperation with the Khatam al-Anbia Construction Headquarters,” an Islamic Revolutionary Guard Corps company, “will be expanding the Imam Airport … And on January 17, Mehr News Agency reported on the signing of a memorandum of understanding with China concerning the construction of new sports stadiums in Tehran.”
    • Shargh quoted Mohammad-Reza Rezaei Kouchi, a member of the parliamentary Construction and Development Committee: “With more than 500,000 construction engineers in this country, there is absolutely no reason for the presence of foreign companies in the housing sector.” Quoting anonymous sources, Shargh continued: “Those engaged in housing construction have said this is an unwelcome government intervention in the housing market, and there is no need for foreign investment or the involvement of foreign companies. Other media outlets accuse the government of auctioning the oil and warn there is no need to use oil revenue for unnecessary expenditures instead of fundamental infrastructure development … Other critics point at previous bad experiences with Chinese contractors … who left the Iranian market under the pretext of complying with the international sanctions regime.”
    • Other critics interviewed by Shargh did not question the nature of bartering with China but rather criticized the projects being developed. Lotf-Ali Bakhshi, a retired economics professor, has started a “lobbying campaign” to persuade the government to cooperate with China to build solar energy plants instead of housing. Arash Najafi, a member of the Iran Chamber of Energy, accused the government of trying to build “showy” and “glitzy” projects for the public to see rather than attending to the fundamental needs of the country. Najafi also warned: “China is very risk averse when it comes to its investments and is unlikely to invest in Iran’s energy sector. Previously, China left the development of the Azadegan oil field and was not ready to invest in the South Pars gas field, but it is engaged in vast investments in the energy sector of the Arab states of the Persian Gulf … China even prefers Pakistan to Iran when it comes to energy sector investments.”

The views represented herein are the author's or speaker's own and do not necessarily reflect the views of AGSI, its staff, or its board of directors.

Ali Alfoneh

Senior Fellow, AGSI

Analysis

Iran’s Strategic Dilemma: Capitulation or Parity?

The current cease-fire may just be an interregnum between rounds of conflict between Israel and Iran, as Iranian decision makers appear more inclined to pursue strategic parity than capitulate.

Ali Alfoneh

7 min read

Iran's army commander-in-chief General Amir Hatami attends a video call with top commanders in Zolfaghar central headquarters, Iran, June 23. (Iranian Army Press Service via AP)

The United States on the Verge of Another “Forever War”?

U.S. entry in the air war on Israel’s side could have seriously destabilizing consequences in the broader Gulf region unless the war ends quickly.

Ali Alfoneh

4 min read

Smoke rises from the building of Iran's state-run television after an Israeli strike in Tehran, Iran, June 16. (AP Photo)

Iran Is Attacked, the Gulf Reacts

AGSI explains what Israel’s sudden and massive attack on Iran is likely to mean for Gulf Arab states, Iran, the United States, and global and regional economies.

34 min read

Smoke rises after an explosion in Tehran, Iran, Friday, June 13. (AP Photo/Vahid Salemi)

A Path to a Stronger United States in the Gulf

AGSI offers pragmatic, targeted policy recommendations for the Trump administration to maximize U.S. political and economic influence with the crucial emerging regional powers in the Gulf.

20 min read

President Donald J. Trump, fifth left, attends a group photo session with Saudi Crown Prince Mohammed bin Salman, fourth right, UAE Crown Prince Khaled bin Mohammed bin Zayed al-Nahyan, second right, Bahraini Crown Prince and Prime Minister Salman bin Hamad al-Khalifa, left, Qatari Emir Tamim bin Hamad al-Thani, third left, Kuwaiti Emir Meshal al-Ahmed al-Jaber al-Sabah, second left, GCC Secretary-General Jasem Albudaiwi, right, during the GCC Summit in Riyadh, Saudi Arabia, May 14. (AP Photo/Alex Brandon)
View All

Events

Jun 23, 2025

U.S. Strike on Iran: Regional and Diplomatic Fallout

On June 23, AGSI hosted a discussion on the United States' attack on Iranian nuclear sites.

President Donald J. Trump speaks from the East Room of the White House in Washington, June 21, after the U.S. military struck three Iranian nuclear and military sites, as Vice President JD Vance, Secretary of State Marco Rubio, and Defense Secretary Pete Hegseth listen. (Carlos Barria/Pool via AP)
President Donald J. Trump speaks from the East Room of the White House in Washington, June 21, after the U.S. military struck three Iranian nuclear and military sites, as Vice President JD Vance, Secretary of State Marco Rubio, and Defense Secretary Pete Hegseth listen. (Carlos Barria/Pool via AP)

Jun 16, 2025

Assessing Iranian, U.S., and Gulf Reactions and Options Following Israel’s Unprecedented Attack on Iran

On June 16, AGSI hosted a discussion on Israel's attack on Iran.

Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13. (Majid Asgaripour/WANA via REUTERS)
Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes in Tehran, Iran, June 13. (Majid Asgaripour/WANA via REUTERS)

Apr 29, 2025

The Real Deal? Are Washington and Tehran Closer to a Compromise?

On April 29, AGSI hosted a discussion on the U.S.-Iranian nuclear negotiations.

Iranian Foreign Minister Abbas Araghchi, left, meets his Omani counterpart Sayyid Badr Al Busaidi prior to negotiations with Special Envoy to the Middle East Steve Witkoff in Muscat, Oman, Saturday, April 12. (Iranian Foreign Ministry via AP)
In this photo released by Iranian Foreign Ministry, Iranian Foreign Minister Abbas Araghchi, left, meets his Omani counterpart Sayyid Badr Albusaidi prior to negotiations with U.S. Mideast envoy Steve Witkoff in Muscat, Oman, Saturday, April 12, 2025. (Iranian Foreign Ministry via AP)

Jul 11, 2024

In Conversation With Ali Alfoneh: Does Iran’s Presidential Election Matter?

On July 11, AGSIW hosted a discussion on Iran's presidential election.

People watch the debate of presidential candidates at a park in Tehran, Iran July 1, 2024. (Majid Asgaripour/ West Asia News Agency via REUTERS)
People watch the debate of presidential candidates at a park in Tehran, Iran July 1, 2024. (Majid Asgaripour/ West Asia News Agency via REUTERS)
View All