US Accuses China of Funding Iran Amid Hormuz Tensions

US-China tensions rise as Washington links Beijing’s Iran oil imports to terrorism financing, urges support to reopen Strait of Hormuz ahead of Trump visit

Sharp remarks from US

In a pointed escalation of rhetoric, US Treasury Secretary Scott Bessent has accused China of effectively financing Iran by continuing to import large volumes of its oil, describing Tehran as the “largest state sponsor of terrorism”. The comments come at a sensitive moment, just days before US President Donald Trump is scheduled to visit Beijing for high-level talks with Chinese President Xi Jinping.

According to officials familiar with the matter, the remarks were made during a media interaction on Monday and reflect growing unease within Washington over Beijing’s energy ties with Tehran.

Oil trade under scrutiny

Bessent alleged that China has been purchasing nearly 90 per cent of Iran’s energy exports, a claim that underscores longstanding US concerns over sanctions enforcement. “Iran is the largest state sponsor of terrorism, and China has been buying most of their energy,” he said, suggesting that such transactions were helping sustain the Iranian regime despite Western pressure.

The US has, since 2018, attempted to restrict Iran’s oil revenues under its “maximum pressure” campaign, following its exit from the nuclear agreement known as the Joint Comprehensive Plan of Action (JCPOA).

Hormuz crisis deepens

The criticism comes amid rising tensions in the Strait of Hormuz, a critical maritime corridor through which a significant portion of the world’s oil supply passes. Recent disruptions, which Washington attributes to Iranian actions, have affected shipping movement in the region.

Bessent said the US was working to reopen the waterway through an initiative dubbed “Project Freedom”, aimed at ensuring safe passage for vessels currently stranded or rerouted due to the situation.

Call for China’s support

Despite the sharp tone, the US has urged Beijing to play a constructive role. Bessent called on China to back international efforts to secure the Strait of Hormuz and to use its diplomatic leverage with Iran.

“I would urge the Chinese to join us in supporting this international operation,” he said, adding that Beijing’s influence could prove critical in persuading Tehran to ease tensions and restore normalcy in the shipping lane.

Sources indicated that Washington sees China’s involvement as key, given its deep economic engagement with Iran, particularly in the energy sector.

Diplomatic pressure on Tehran

Alongside operational support, the US is also pushing for diplomatic intervention. Officials suggested that China could help de-escalate the crisis by encouraging Iran to reopen the strait and avoid further confrontation.

Bessent reiterated that the US had made it clear Iran does not have unilateral control over the strategic passage and that international cooperation would be necessary to maintain maritime security.

UN stalemate continues

Efforts to build a global consensus, however, have faced hurdles. At the United Nations, a proposed resolution condemning Iran’s alleged blockade of the Strait of Hormuz was recently vetoed by China and Russia, leading to a diplomatic impasse.

Defending Beijing’s position, Chinese envoy Fu Cong said the draft lacked balance and did not adequately reflect the broader geopolitical context, including actions by the US and its allies.

Beijing pushes back

China has also pushed back against US sanctions targeting its firms engaged in Iranian trade. Responding to recent measures, Chinese Foreign Ministry spokesperson Lin Jian criticised what he described as “illicit unilateral sanctions” and cautioned Washington against overreach.

Analysts note that China’s continued engagement with Iran reflects both strategic and economic considerations, including energy security and regional influence.

Focus on upcoming summit

The developments come ahead of the anticipated Trump–Xi meeting, which is expected to cover a wide range of issues including trade, security, and regional stability. While tensions remain high, there are indications that both sides may seek to stabilise ties through dialogue.

Bessent suggested that leader-level engagement could help ease friction, noting that mutual respect between the two countries’ leadership has previously contributed to stability.

As the situation unfolds, the US-China-Iran dynamic is likely to remain a focal point in global diplomacy, particularly with the Strait of Hormuz tensions continuing to impact energy markets and international shipping.

Iran Vows No Ceasefire Until Compensation, Sanctions Relief Secured

Tehran sets conditions for ending hostilities, demanding a full lifting of economic sanctions and binding guarantees from the United States against future interference.

Iran has firmly stated that the ongoing military conflict will not cease until its demands are met, including financial compensation for losses incurred during the 25-day-long war with Israel and the United States. Senior Iranian officials on Tuesday laid out a hardline stance, dismissing any prospect of a ceasefire without concrete diplomatic and economic assurances.

Tehran Lays Out Conditions

Mohsen Rezaei, a senior adviser to Supreme Leader Mojtaba Khamenei, declared in a televised address that Iran’s position is non-negotiable. He asserted that all economic sanctions must be lifted, and the US must provide a "firm guarantee" against any future interference in Iran’s affairs. Rezaei added that Iranian military operations continue with full force, with the leadership maintaining a firm grip on the situation under the new Supreme Leader. Parliament Speaker Mohammad Bagher Ghalibaf echoed the sentiment, noting that the public is demanding strict punishment for those responsible for the attacks against the nation.

Rezaei Blames Israel for Prolonged War

Rezaei claimed that the conflict could have concluded within a week had it not been for the actions of Israel. According to the senior official, the United States was prepared to agree to a ceasefire and de-escalate the situation. However, he alleged that Israeli Prime Minister Benjamin Netanyahu insisted on continuing the military campaign, thereby prolonging the war. Rezaei further stated that by the 15th day of the conflict, even Washington had come to realize there was no clear path to victory in the region.

Conflicting Accounts on US-Iran Talks

The political landscape is further complicated by conflicting reports regarding potential negotiations. US President Donald Trump claimed on his social media platform that talks had been held with Iran, leading him to delay strikes on Iranian power plants for five days. Conversely, Iranian officials have categorically denied that any direct talks have occurred. Speaker Ghalibaf labelled the claims as “fake news” designed to manipulate financial and oil markets. However, a senior Iranian official provided a nuanced account to the BBC, confirming that "points from the US" were received through mediators and were currently under review.

Market Volatility Amid Diplomatic Confusion

The mixed signals have sent shockwaves through global financial markets. Brent crude oil prices briefly jumped back above $100 per barrel on Tuesday after a dramatic 10% plunge the previous day, reflecting the uncertainty. The initial drop was triggered by Trump’s statements about delaying strikes, while the subsequent rise followed Iran’s firm rejection of the talks and its reaffirmation of military readiness. Asian stock markets, particularly in South Korea, showed a slight recovery from Monday’s 17-year low for the won, as investors cautiously priced in hopes of de-escalation.

Regional Military Actions Escalate

The ground and aerial situation remains volatile. Israel confirmed a new wave of missiles was launched from Iran towards its territory, with air defence systems actively working to intercept them. Meanwhile, Iran released footage of missiles at an underground facility, a display of its military capabilities. In a separate development, the Israeli military reportedly destroyed the al-Qasmiya Bridge over Lebanon’s Litani River, a move that effectively cuts off southern Lebanon from the north. The closure of the Strait of Hormuz to most maritime traffic continues to strain global supply chains, prompting South Korea to cancel high-level diplomatic trips and Japan to announce the release of oil stockpiles.

What Next: A Diplomatic Crossroads

The coming days are critical as the international community watches for any official confirmation of a backchannel meeting. Reports suggest US Vice President JD Vance and other American officials may meet with their Iranian counterparts in Islamabad this week, though the White House has declined to confirm this, stating the situation remains fluid. For now, Iran’s official stance remains rigid, demanding a resolution on its terms, while the United States and Israel weigh their next military or diplomatic moves. The global economy remains on edge, bracing for either a de-escalation or a further intensification of the conflict.