US targets Chinese refinery, entities in new round of Iran sanctions

On March 20, the U.S. issued new sanctions targeting one individual and several entities, including a Chinese "teapot" oil refinery, for purchasing and processing Iranian crude oil. 

These sanctions, detailed on the Treasury Department's website, mark Washington's fourth round of measures since President Donald Trump announced in February that he would be re-imposing a "maximum pressure" campaign aimed at reducing Iranian oil exports to zero, Caliber.Az reports, citing foreign media.

The specific refinery targeted is Shandong Shouguang Luqing Petrochemical Co., Ltd., based in China. U.S. Treasury Secretary Scott Bessent highlighted the significance of these actions, stating, "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."

China, which does not recognize U.S. sanctions, remains the largest importer of Iranian oil. Beijing and Tehran have established a trading system that primarily uses the Chinese yuan and a network of intermediaries to bypass the U.S. dollar and avoid exposure to U.S. regulators.

A spokesperson for the Chinese embassy in Washington responded by reiterating China's firm opposition to what it sees as "illegal and unjustifiable unilateral sanctions and so-called long-arm jurisdiction by the U.S."

Earlier this month, China and Russia supported Iran in the face of Washington's demands for renewed nuclear talks. Diplomatic representatives stated that dialogue should only resume on the basis of "mutual respect" and that all sanctions must be lifted first.

The U.S. sanctions have focused on incremental measures, with Washington avoiding sanctions on major Chinese banks that facilitate transactions related to Iranian oil. Some analysts have suggested that this strategy is designed to apply minimal pressure on China while gradually intensifying efforts to bring Iran to the negotiating table for a nuclear deal. 

State Department spokesperson Tammy Bruce explained that the Chinese refinery had been purchasing oil from vessels linked to Yemen's Iran-aligned Houthi movement, which the U.S. designated as a Foreign Terrorist Organization earlier this month. Additionally, the U.S. imposed sanctions on the Iranian Ministry of Defense and Armed Forces Logistics, also tied to the shipments.

While Iran maintains that its nuclear program is for peaceful purposes, Western powers argue that the country’s uranium enrichment to near-weapons-grade levels serves no legitimate civilian purpose.

In addition to the refinery sanctions, the U.S. Treasury Department imposed measures on 12 other entities and blocked eight vessels it said were responsible for shipping millions of barrels of Iranian oil to China. These vessels are part of Iran's "shadow fleet," a network of tankers used to supply private refineries. The blocked vessels include the Panama-flagged Aurora Riley and Catalina, as well as the Barbados-flagged Brava Lake.

The U.S. also imposed sanctions on Huaying Huizhou Daya Bay Petrochemical Terminal Storage, an oil terminal in China, for purchasing and storing Iranian crude oil from one of the sanctioned vessels.

In addition, the U.S. placed Wang Xueqing, an individual linked to the refinery, on the Specially Designated Nationals (SDN) list, meaning Americans are prohibited from doing business with him, and his U.S. assets are blocked.

By Tamilla Hasanova