US slaps Iran-related sanctions on oil tankers, China 'teapot' refinery

The US yesterday issued new sanctions intended to hit Iran’s oil exports, including what the State Department said were the first US measures targeting a Chinese “teapot refinery” processing the crude, Reuters reports.

It was Washington’s fourth round of sanctions on Iran’s oil sales since President Donald Trump said in February he was re-imposing a “maximum pressure” campaign including efforts to drive down the country’s exports to zero.

The refinery the Treasury targeted for sanctions is China-based Shandong Shouguang Luqing Petrochemical Co., Ltd.

“So-called ‘teapot’ refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror and the primary backer of the murderous Houthis in Yemen,” US Treasury Secretary Scott Bessent said in a post on X.

“This will be the United States’ first designation of a teapot refinery,” the State Department said in a press release.

So-called “teapot” refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror and the primary backer of the murderous Houthis in Yemen.

President Trump and our administration are committed to…

— Secretary of Treasury Scott Bessent (@SecScottBessent) March 20, 2025

In 2022, the US Treasury Department placed Shandong Haiyou Petrochemical, another Chinese teapot refiner, on its list of sanctioned entities.

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China does not recognize US sanctions and is the largest importer of Iranian oil. China and Iran have built a trading system that uses mostly Chinese yuan and a network of middlemen, avoiding the dollar and exposure to US regulators.

“China has always been firmly opposed to illegal and unjustifiable unilateral sanctions and so-called long-arm jurisdiction by the US,” said a spokesperson for the Chinese embassy in Washington.

Earlier this month, China and Russia stood by Iran after Washington demanded nuclear talks with Tehran, with diplomats saying dialogue should only resume based on “mutual respect” and all sanctions ought to be lifted.

The Treasury also imposed sanctions on 12 entities, and identified eight vessels as blocked property it said were responsible for shipping millions of barrels of Iranian oil to China. These vessels are part of Iran’s “shadow fleet” of tankers that supply the private refineries.

It also placed Wang Xueqing, who it said is linked to the refinery, on the specially designated nationals, or SDN, list. Americans are prohibited from doing business with people placed on that list, and their US assets are blocked.

The State Department said it was imposing sanctions on an oil terminal in China called Huaying Huizhou Daya Bay Petrochemical Terminal Storage for buying and storing Iranian crude oil from a sanctioned vessel.