The U.S. government allowed sanctions on Russian oil to lapse in recent days, largely because China was the main purchaser.

A potential U.S. blockade of Iranian oil could increase total oil outages from the Persian Gulf region from 10-11 million barrels per day to approximately 13 million barrels per day.

To bypass the U.S. financial system, Iran prefers to be paid for its oil in cryptocurrency, Chinese renminbi, or other non-dollar assets.

A successful U.S. blockade on Iran could remove an additional 2 million barrels per day of oil from the market, which was primarily destined for China.

The U.S. government hopes its blockade strategy will compel Iran to return to negotiations and make further concessions.

China has served as the primary buyer for sanctioned Iranian and Russian crude oil.