Iran’s methanol exports to China are under threat following warnings from the US of yet more sanctions on Iranian oil and petrochemical buyers amid nuclear talks, according to Bloomberg.

Data from Kpler shows that around 40% of China’s methanol imports come from Iran – with the country importing 5.2mn tonnes of the commodity in 2024. The product plays a vital role in China’s plastics industry and is an important feedstock for its methanol-to-olefin (MTO) plants, which are important buyers of Iranian exports – according to global intelligence company ICIS.

Last week, US President Donald Trump announced that any country purchasing Iranian oil or petrochemicals could be sanctioned without warning, adding onto already existing sanctions that have targeted Chinese refineries and other Iranian energy exports.

Additional sanctions on Iranian methanol would likely disrupt flows, despite the product travelling to China through countries such as Oman or the UAE.

Ann Sun, senior analyst at ICIS, noted that Iranian methanol played an important role for Chinese MTO units: “Iranian methanol is almost the only efficient way for coastal MTO units to get enough supply,” she said.

Fresh threats from Trump are an attempt to force Iran to agree to US terms on nuclear policy – with talks having recently passed the third stage and awaiting a fourth round in Oman. According to Bloomberg, Iran has expressed that removing sanctions would be a key point in the talks.

If implemented, the new sanctions would be placed on an already huge list – with the US’s extended sanctions targeting tankers beginning to take a toll on Iran’s crude trade to China last year.

Since the introduction of these sanctions, tankers typically transiting the route between Iran and China by anchoring in Southeast Asia have needed to find alternative routes.

The results on an increase in time and effort to ship crude has translated directly to independent refiners in China, who are now faced with higher prices as a result. This has led them to search for alternatives from suppliers in other Middle Eastern regions and Africa, tapping into oil that remains unsold after past trading cycles.