US Treasury Department sanctions Chinese refineries buying Iranian oil

On Thursday, March 20th, the United States Department of the Treasury announced the latest round of sanctions targeting Iran’s oil industry, primarily focusing on China, the largest importer of Iranian oil.

The sanctions were imposed on a Chinese “teapot” refinery, Shouguang Luqing Petrochemical Co., Ltd., located in Shandong Province, and its CEO and legal representative, Wang Xueqing.

The company was identified for purchasing and refining approximately $500 million worth of Iranian crude oil, with some of the vessels transporting this oil coming from foreign terrorist organizations like the Houthi armed group (Ansarallah) and the Iranian Ministry of Defense Armed Forces Logistics (MODAFL).

Treasury Secretary Scott Bessent stated, “The teapot refinery’s purchase of Iranian oil provides a major economic lifeline to the Iranian regime, a primary sponsor of global terrorism. The United States is committed to cutting off Tehran’s revenue sources for continuing to fund terrorism and develop nuclear programs.”

Simultaneously, OFAC imposed sanctions on 19 entities and vessels responsible for transporting Iranian oil, forming part of Iran’s “shadow fleet” that supplies refineries like Shouguang Luqing.

This marks the fourth round of sanctions since President Trump issued an executive order in February to exert “maximum pressure” on Iran.

The “maximum pressure” campaign aims to reduce Iran’s oil exports to zero to curb its ability to fund terrorism and destabilize the region.

Following the sanctions imposed by Trump in his first term, Iran’s oil exports nearly reached zero, but after Biden took office, Iran managed to evade the sanctions, and exports experienced a rebound. Trump criticized former President Biden for not strictly enforcing the oil export sanctions.

According to the Energy Information Administration, despite facing US sanctions, Iran’s oil exports brought in $53 billion in revenue in 2023 and $54 billion in 2022.

Based on data from the Organization of the Petroleum Exporting Countries (OPEC), Iran’s crude oil production in 2024 reached its highest level since 2018.