Billions of dollars linked to Iran continue to move through US banks each year despite Washington's extensive sanctions against Tehran, according to a report by The Wall Street Journal. The US Treasury identified around $9 billion in Iranian funds that passed through US banks in 2024, highlighting the difficulty of completely cutting Iran off from the global financial system.

Iranian-linked funds can reach the US banking system indirectly through foreign financial institutions that maintain correspondent banking relationships with American lenders. The money can be routed through networks involving foreign banks, shell companies and currency exchanges, making it harder for financial institutions to identify its Iranian origins. The findings come as the Trump administration has increased economic pressure on Tehran and warned companies and countries that dealings with Iran could result in losing access to the US financial system.

Iran continues to rely heavily on its oil industry, which remains its largest source of revenue. Although US sanctions have restricted Iranian oil exports, large quantities of crude are being stored on tankers in Asian waters, particularly around Malaysia. China remains Iran's largest oil customer and accounts for more than 80 per cent of its exports. Kpler data cited in the report indicated that China imported more than 500,000 barrels of Iranian oil per day in August. Ship-to-ship transfers can further obscure the origin of the crude before it reaches Chinese buyers.

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Vortexa estimates that around 80 million barrels of Iranian crude are currently held in floating storage in Asian waters, potentially representing billions of dollars in revenue for Tehran. Iran has also reduced its reliance on the US dollar in trade with China, with some oil transactions settled in Chinese yuan. The currency can then be used to purchase Chinese goods and services, while some arrangements involve exchanging oil for infrastructure projects carried out by Chinese companies in Iran.

Cryptocurrency has become another channel for Iranian transactions. Researchers cited by The Wall Street Journal found that Iran has used billions of dollars in cryptocurrency for trade and to obtain weapons and other goods. The Islamic Revolutionary Guard Corps has also used cryptocurrency exchanges to receive oil payments, including transactions involving Chinese buyers. However, Western officials cited in the report noted that Tehran still requires US dollars and other major currencies for imports, military equipment and support for regional allies.

To access those currencies, Iran has developed networks involving shell companies and exchange houses in financial centres such as Hong Kong and Dubai. These businesses can help convert oil earnings and other export revenues into dollars, euros and UAE dirhams while making the Iranian connection more difficult to trace. The US Treasury continues to target banks, companies and financial networks through sanctions, but shutting down individual entities does not necessarily dismantle the wider system through which Iranian-linked money continues to circulate.

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