Who Would Be Hit If the U.S. Imposes New Sanctions on Iran?

Islamabad — New U.S. financial sanctions on Iran would ripple beyond Tehran, affecting key partners including China, Turkey, Iraq, Oman, Pakistan and India through disrupted energy flows, trade channels and banking ties.
China: As Iran’s largest oil buyer, China would see major impacts. Chinese private refineries have long routed Iranian crude through intermediaries (often via Malaysia, Indonesia) and settled transactions in yuan, complicating U.S. monitoring. Kepler estimates China bought about 1.38 million barrels per day of Iranian oil in 2025. U.S. secondary sanctions targeting intermediaries or banks could curb China-Iran energy trade or push it further underground.
Turkey: With annual bilateral trade of roughly $5–6 billion and Iranian gas supplying around 13% of Turkey’s imports in some estimates, sanctions could squeeze Turkey’s energy supplies and raise costs for industry and consumers.
Iraq: Trade with Iran exceeded $10 billion in 2025. Iraq depends on Iranian energy for electricity generation; sanctions would force Baghdad into a difficult balancing act between securing energy supplies and avoiding U.S. penalties, risking power shortfalls and higher import costs.
Oman: Longstanding friendly ties and a mediating role mean Oman could face diplomatic strains and disruptions in regional shipping and trade flows, though direct economic shock may be limited compared with larger partners.
Pakistan: Iran–Pakistan trade includes oil, wheat, rice, livestock and medicines, with informal trade sizable. U.S. actions targeting Iran’s partners could pressure Pakistan’s trade and banking channels, complicate payment mechanisms, and disrupt energy and supply chains at a time Islamabad and Tehran aim to boost bilateral commerce.
India: India’s trade with Iran fell sharply after 2020 and remained subdued into 2025–26. Fresh U.S. sanctions could further constrain energy imports and financial transactions, forcing New Delhi to navigate strategic ties with Washington and Tehran.
Key implications:
Energy supply disruptions and price volatility in regional and global markets.
Shift toward alternative suppliers, opaque trading routes, and non-dollar settlements to bypass restrictions.
Increased risk for banks and firms facilitating Iran trade due to secondary sanctions.