September 11th, 2026: Iran’s Hidden China Trade Network Just Got Exposed & Ukraine Strikes Russia’s Arctic Gas Hub

It's Friday, the 11th of September, the 25th anniversary of 9-11. Welcome to the President's Daily Brief. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, Reuters reveals how Iran used a billion-dollar barter system with China to maintain a sanctions-busting steady trade of Iranian oil for Chinese goods, including military equipment. Later in the show, British, Norwegian, and American forces disrupted a secret Russian submarine operation reportedly aimed at crippling NATO's undersea infrastructure. Plus, Ukrainian drones are hitting Russia from the Arctic to the Black Sea, targeting key gas infrastructure. And striking the resort city of Sochi. And in today's Back of the Brief, the long-running U.S. case against Huawei has finally reached trial, with federal prosecutors accusing the Chinese tech giant of stealing American technology and operating as a criminal enterprise. But first, today's PDB Spotlight. Iran reportedly found a way to turn sanctioned oil into billions of dollars worth of Chinese goods without sending the money through the international bank. And according to a new Reuters report, the arrangement has become an increasingly important financial lifeline for Tehran, one that sources say has also been used to obtain military supplies and equipment. The system is essentially a sophisticated form of barter trade. Iran sells oil to China, but instead of the proceeds being wired back to the regime through banks that are vulnerable to U.S. sanctions, the money stays inside China. Iran receives credits against those oil sales. And can then use those credits to pay Chinese companies for goods and services. Reuters says somewhere between two and two and a half billion dollars flowed through one part of this system over the past year alone. Iran has reportedly used those funds to acquire medicine, vehicles, and communications equipment. Sources also told Reuters that the mechanism was used at least once in connection with contracts for millions of dollars worth of air defense equipment, although Reuters could not independently verify those transactions. Reuters says that the mechanism was used at least once in connection with contracts for millions of dollars worth of air defense equipment, At the center of the arrangement is a mysterious China-based entity known as Chuxin. According to sources familiar with intelligence collected on the operation, a buyer acting for the Chinese state-owned oil trader Zhuhai Zhenrong deposited hundreds of millions of dollars a month with Chuxin to cover purchases of Iranian crude. From there, the money could be directed toward Chinese companies working on projects inside Iran or placed into a special purpose vehicle that Iranian importers could buy. draw from to buy Chinese goods. And here's one of the more interesting details. Reuters searched Chinese corporate records and couldn't find any financial institution called Chuxin. One source suggested that it may effectively exist only on a spreadsheet. Chinese manufacturers receiving payment through the system may not necessarily be dealing with Iran directly, and Reuters found no indication that those companies themselves were violating sanctions. Instead, the oil sales and eventual purchase of Chinese goods are separated by multiple entities and accounts, making the underlying transactions much harder to follow. Most of the money reportedly goes toward infrastructure. Sources say roughly 70% of the Iranian oil proceeds handled through Chuxin have been allocated to projects inside Iran. The rest can be placed into that special purpose vehicle that's used to finance imports. The arrangement also gives Beijing something that it wants, discounted oil. China was already buying more than 80% of Iran's shipped crude oil last year, averaging roughly 1.4 million barrels per day. Decades of sanctions have left Tehran, with relatively few customers, willing to take that oil, which has made China obviously enormously important to the Iranian economy. In this case, Beijing gets access to discounted Iranian crude while attempting to keep its largest banks and internationally exposed companies away from the transactions that could trigger severe U.S. penalties. Andrea Ghiselli, a researcher who studies Chinese relationships in the Middle East, told Reuters that Beijing wants to demonstrate that Washington can't dictate all of its trade through the threat of secondary sanctions. But China also has no interest in seeing its major financial institutions cut off from the global financial system. So Beijing basically gets what they want, which is plausible deniability through this barter trade system. That helps explain why a system like this would be attractive to both governments, of course. Iran gets to extract value from sanctioned oil, China gets cheap crude, and the financial architecture makes it considerably more difficult for Washington to identify a major Chinese bank simply processing payments directly for Tehran. The mechanism reportedly dates back to at least 2021, when it was initially used to help Iran purchase medicine and COVID vaccines. Sources say its importance has increased as Washington tightened economic pressure. But the war may have a weakness in the entire system. Reuters says it could not determine how badly the current U.S. naval blockade has disrupted this arrangement. What we do know is that no Iranian crude shipments have successfully crossed the Strait of Hormuz on its way to China since the blockade was reinstated on July 14th. And that creates, of course, a different problem for Tehran. For years, the challenge was figuring out how to sell oil without having the payments frozen, seized, or blocked by the international financial system. Iran and China appear to have developed an elaborate answer to that problem. But none of those financial workarounds matter very much if the oil can't reach the buyer. Chinese refiners are already searching elsewhere for supplies, snapping up crude from West Africa, Canada, and South America, as Iranian and Russian barrels become harder to obtain. All right, coming up next, NATO allies disrupt a secret Russian submarine operation aimed at undersea infrastructure. And Ukrainian drones hit targets from Russia's Arctic gas fields to the resort town of Sochi. I'll be right back. Hey, Mike Baker here with a tip on how to jumpstart your day. Now, personally, I've been trying to rethink my morning routine lately, especially when it comes to how much caffeine I actually need. And that's where Mudwater comes in. 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The operation was first disclosed publicly by Britain and Norway back in April, when the two countries revealed that they had spent weeks tracking unusual Russian submarine activity in the North Atlantic. But new reporting from Reuters fills in the most important details. The mission extended into waters near a Norwegian archipelago. American forces were involved in the monitoring of the Russian subs, and Western officials believe the Russians were testing a previously undisclosed capability designed to damage undersea infrastructure while leaving little evidence of what actually caused the failure. According to Reuters, the Russian operation was carried out by the Main Directorate for Deep Sea Research, better known by its Russian acronym GOOGIE, which is definitely more fun to say than Main Directorate for Deep Sea Research. Despite the innocent-sounding name, GOOGIE is a secretive military organization that operates specialized submarines and other deep sea vessels capable of working around cables and pipelines on the ocean floor. The Russian deployment reportedly included an Akula-class nuclear-powered attack submarine, along with specialized submarines and other deep sea vessels. The operation was part of the mission, and some of the vessels belonged to GOOGIE. Western officials believe the Russians were using deep sea submersibles to simulate the deployment of a sophisticated system intended to disable undersea cables in the event of a conflict with NATO. Officials would not describe exactly how the technology works. Now, it's important to note that the Russians didn't actually cut or damage any cables during this operation. What Western officials say they witnessed was a rehearsal, Russian forces practicing how they could, carry out such an attack. British, Norwegian, and American forces tracked the Russian vessels and eventually confronted them at sea. Reuters reports that the Russians were prevented from completing the exercise and ultimately withdrew from the area. At roughly the same time, British and Norwegian officials took their findings directly to Moscow, making clear that NATO knew what the Russians had been doing and were aware of the new capability. Norway's defense minister said the operation was intended to send Moscow a message that Russia could not operate covertly in the high north and that attacks against critical infrastructure would be detected and met with consequences. The location helps explain why NATO reacted so aggressively. Two fiber-optic cables run roughly 1,400 kilometers between mainland Norway and the archipelago, reaching depths of nearly 9,000 feet. Now, those cables don't provide just internet access to an isolated Arctic community. They carry enormous amounts of satellite data downloaded at Svalsat. That's the world's largest satellite ground station and part of NASA's near-space network. And the cables themselves are remarkably vulnerable. Much of the infrastructure carrying global communications and financial data across the oceans is only about the thickness of a garden hose. Some sections are buried beneath the seabed. Others simply rest on the ocean floor, often thousands of feet below the surface. Protecting every mile of that network is practically impossible. That vulnerability has received much more attention since the destruction of the Nord Stream pipelines back in 2022 and a series of subsequent incidents involving cables and other infrastructure around Europe. So, let's take a look at some of the most important developments in the world. Let's take a look at some of the most important developments in the world. At least 11 subsea cables were damaged or severed in the Baltic between October 2023 and the end of last year. That's according to data cited by Reuters. Those incidents have had different suspected causes and should not all be attributed to Russia, but they have pushed NATO to dramatically increase monitoring of the seabed. The amount of suspicious maritime activity around critical infrastructure has also been climbing. Maritime intelligence firm Windward says incidents of ships slowly lingering over or near subsea infrastructure in the North Sea increased 52 percent last year to more than 13,000 instances. That's a lot of loitering. Surveying cables in international waters is not itself illegal, but security officials worry that extensive mapping could provide the information needed to attack those systems during a war. Western intelligence officials are increasingly viewing that possibility as part of the broader confrontation with Moscow. Reuters reports that some U.S. intelligence analysts are concerned about the possibility of a nuclear war. "We're concerned that Russia could eventually attempt to test NATO's Article 5 mutual defense commitment and that disabling undersea infrastructure could play a role in such a confrontation." The concern also extends beyond the ocean floor. CIA Director John Ratcliffe traveled to Moscow in August of this year and, according to Reuters, warned Russian intelligence officials against escalating sabotage operations in Europe. Reuters could not determine whether the Arctic submarine operation specifically came up during those discussions. For its part, Russia has repeatedly denied conducting sabotage operations against NATO countries or preparing for a confrontation with the alliance. Oh, well, if they deny it, then I'm sure it's fine. Moscow's defense ministry did not respond to Reuters' questions about this particular operation. All right, turning now to the war in Ukraine, where a part of Russia that had largely escaped Kiev's long-range drone campaign is no longer quite as so far out of reach. More than 1,000 and 900 miles from Ukraine, Russia's remote Yamalo-Nenets region in western Siberia had remained untouched by Kiev's attacks on Russian critical infrastructure. Well, that changed on Wednesday, when Ukrainian drones reached this remote Arctic territory. And it's that distance that makes this strike so remarkable. Now, as I've discussed here on the PDB, Ukraine has spent much of the war steadily expanding the reach of its drone campaign, hitting Russian oil refineries, storage facilities, and export infrastructure hundreds of miles from the Arctic. And, of course, there's no way for Ukraine to achieve this, as it's only 200 miles from the Ukrainian border. But reaching all the way into western Siberia is something entirely different. Again, that's 1,900 miles. According to Firepoint, the Ukrainian manufacturer of the drones, that's a new distance record for a Ukrainian drone strike. And Kiev wasn't sending them there that far just to prove that it could. Ukraine's special operations forces say the drones targeted two major gas condensate facilities in the region. However, Russian authorities tell a somewhat different story. The regional governor there says a drone was shot down and that falling debris caused a fire. No casualties were reported, and the extent of the damage is still being assessed. Now, Yamalo-Nenets in western Siberia rarely comes up during one's dinner conversation. But when it comes to keeping Russia's enormous energy industry running, it is difficult to overstate its importance. The remote Arctic region accounts for roughly 80% of the country's natural gas production. The targeted area is sometimes called Russia's unofficial gas capital. The region responsible for the vast majority of Russia's natural gas production and for the past several years has been largely insulated from Kiev's drone campaign. That new vulnerability is already getting attention far beyond Russia. European natural gas prices climbed to their highest level since December 2022, one day after the attack. Europe was already dealing with sharply higher prices as disruptions to liquefied natural gas shipments from the Persian Gulf tightened supplies. Now, despite the spike in pricing, there is no indication that these Ukrainian drone strikes caused a major interruption to Russian gas production. But Ukraine has now given energy traders another potential source of disruption to consider. And in other news from the long-running Putin conflict, hundreds of miles to the southwest, Ukrainian sea drones also struck around the Russian Black Sea resort city of Sochi on Wednesday night. Russian authorities say eight people were injured and some beach infrastructure was damaged in Sochi, where Vladimir Putin, incidentally, has an official residence. I'll bet it's lovely. Video verified by Reuters showed weapons being fired and an explosion near the city's waterfront, with people heard screaming. Now, Ukraine striking Russia with drones is hardly unusual at this point. But sea drones are different. Ukraine has used unmanned boats extensively against Russia's Black Sea fleet and other maritime targets. But attacks involving those weapons around Russian coastal cities have been limited. Both attacks, one in western Siberia and one in a major coastal resort town, point to the same larger problem for Moscow. Putin launched this war believing that Russia and its population would remain safely removed from the fighting. Ukraine has spent years steadily chipping away at that assumption, pushing its strikes deeper into Russia and bringing the fight closer to the civilian population. Alright, coming up next in the back of the brief. Huawei goes on trial in Brooklyn, New York, where US prosecutors are accusing the Chinese telecom giant of stealing American technology what to fuel its growth. More on that when we come back. Hey, Mike Baker here. Now, if you're a PDB regular, and I hope you are, you know that I'm constantly traveling, right? It's like, where's Wally or where's Waldo, depending on where you're from. Recording the podcast from countless airport lounges, hotels, and the occasional secret lair. And all that travel means I always need to keep the phones and laptop charged. And that's why I'm a huge fan of the Ridge 5-in-1 Travel Power Bank. Look, combining MagSafe wireless charging, an Apple Watch charger, lightning, and USB-C, the Ridge Power Bank handles every charging need in one device. Built-in cables eliminate the need for extra cords or adapters, and with 20 watts and a powerful battery, getting three full charges is simple. Plus, it magnetically attaches for convenience and ease of use. The Ridge Power Bank is built to last. And, get this, it's backed by a lifetime warranty. One thing to pack, five ways to power. You can find Ridge's Power Bank at Best Buy, or our listeners at the PDB can get 10% off at Ridge.com by using code PDB at checkout. Just head on over to Ridge, that's R-I-D-G-E, Ridge.com, and use code PDB, and you're all set. And after your purchase, well, they'll ask where you heard about them. If you don't mind, do me a favor. In today's Back of the Brief, the government's long-running case against China's Huawei company has finally reached a jury. Prosecutors say the tech giant operated as a criminal enterprise, stealing from American companies to help build its global telecommunications empire. The Justice Department summed up its case in just a handful of words, quote, "theft, lies, cover-up," end quote. Federal Prosecutor Taylor Stout told jurors this week, quote, "For 20 years, and that's how Huawei victimized American companies and abused the American financial system, all in an effort to dominate the telecommunications industry," end quote. The trial began Wednesday in federal court in Brooklyn, New York, nearly eight years after the U.S. first indicted Huawei. Well, the wheels of justice do turn slowly, they say. Prosecutors accuse Huawei of stealing trade secrets from five American companies, concealing its business in Iran, and abusing the American financial system. So, let's briefly walk through the government's case, or at least some points of the government's case. One example involves Cisco Systems, where the government says Huawei stole source code used in the company's internet routers. Another involves T-Mobile, which had developed a robotic arm used to test smartphones by mimicking the way a human hand interacts with them. Prosecutors say a Huawei employee was caught stealing part of that robot. What? They told jurors that they'll see video of that theft during the trial. He was trying to take the robot's arm. Now, Huawei strongly denies that this amounts to a broader corporate conspiracy. Its attorneys told jurors, quote, "Competition, not conspiracy. Innovation, not theft. Ordinary business dealings, not criminal conduct," end quote. Clearly, the defense team is being paid sufficiently enough to be able to say all that with a straight face. Huawei isn't necessarily arguing that every incident never happened. Hmm. Its defense is that prosecutors are turning misconduct by individual employees into evidence of a company-wide conspiracy. They pointed to another incident in which a Huawei employee improperly photographed a Fujitsu networking device at a trade show. calling it a, quote, foolish act. Ah, those darn meddling kids and their foolish ways. No conspiracy to see here, folks. Huawei says management worked to address misconduct when it discovered it, but the Justice Department says these were not random incidents. Prosecutors argue they were part of a larger pattern that allowed Huawei to acquire technology, reduce research and development costs, and compete against the same companies whose technology it was allegedly taking. But the government's case goes beyond alleged technology theft. There's also the subject of Iran. In fact, the original criminal case against Huawei began in 2018 with allegations that the company misrepresented its business dealings in Iran to international banks. Prosecutors say Huawei concealed the true nature of its relationship with Skycom, a company operating in Iran, to hide the extent of Huawei's business there from international banks. That allegedly allowed millions of dollars to move through the U.S. financial system despite American sanctions. The government also alleges Huawei's activities helped the Iranian regime conduct surveillance against its own citizens. Huawei disputes that part of the case as well. Nothing to see here. We're all very innocent. Its attorneys say the banks already knew about Huawei's business in Iran and that there's no evidence the company knew those transactions would violate U.S. sanctions. So, a case that began with allegations surrounding Iran eventually grew into a sprawling racketeering prosecution, with the government arguing that these were not isolated, but part of a broader pattern of illegal activity by Huawei. The trial is expected to last roughly three months. And that, my friends, is the president's daily brief for Friday, the 11th of September. It is hard, frankly, to believe that 9-11 was already 25 years ago. For some, it's like it happened yesterday. Now, for some, it's a distant memory. And for some, frankly, it's not a memory at all. I mean, that is how life works. But in the moment, or in the aftermath, are enormous in their impact, gradually fade over time. Pearl Harbor, Vietnam, 9-11, the pandemic. Eventually, they all get a little blurry, a little out of focus. And then, for a lot of folks, they move on. But for the families and friends impacted by that terrible day, and for all those who answered the call in the wake of 9-11, that day will never be forgotten. Now, remember, if you have any questions, or comments, I hope you'll reach out to me at pdb at thefirsttv.com. And finally, remember what we always say here around PDB Headquarters. If it's Friday, it's time for another episode of our extended weekend show, the PDB Situation Report. Now, admittedly, that is not the catchiest of sayings, but it's true nonetheless. Every Friday evening at 10 p.m. on the First TV, we fire up a brand new episode of the Situation Report. Great guests, information, analysis, come on, what's not to like? You can always so catch it and past episodes on our YouTube channel, just wander on over to YouTube and search up at President's Daily Brief, and of course, available on podcast platforms everywhere. I'm Mike Baker, and I'll be back later today with the PDB Afternoon Bulletin. Until then, stay informed, stay safe, stay cool.