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GeopoliticsMedium•7 March 2026•

1 min read

U.S. Sanctions on Iran and Venezuela Set to Drive Up China's Energy Costs by Billions

Donald Trump's portrait over a map of Iran, oil refineries, barrels, and a rising financial chart in fiery tones.

Key Facts

1U.S. interventions in Venezuela and Iran are leading to structurally higher energy costs for China during Trump's second term.

China is bracing for significant economic headwinds as the U.S. intensifies sanctions on Iranian and Venezuelan oil exports during the second Trump administration. The removal of discounted oil barrels is expected to add between $6.8 billion and $8 billion annually to China's national import bill. This shift aligns with the U.S. National Security Strategy (NSS), which leverages energy as a geopolitical tool to exert economic pressure on adversaries. Furthermore, the combination of higher Brent Crude prices and rising logistics costs is clouding the economic growth outlook for the world's second-largest economy. Market analysts suggest these structural cost increases could weigh heavily on the Yuan (USD/CNY) and Chinese equities, including major ETFs like FXI and MCHI. Ultimately, these strategic interventions are forcing China to shift away from cheaper energy sources, impacting its broader industrial competitiveness.