U.S. Sanctions Chinese Refinery and Tankers Ahead of Talks with Iran

A day after Iran’s Foreign Ministry confirmed that indirect talks are underway with the United States, the Treasury Department moved to further increase the pressure targeting a Chinese customer of Iran’s oil and more tankers involved in the trade. It was the second time the U.S. has targeted a private, so-called “teapot refinery” in China.

Since declaring a campaign of “maximum economic pressure” on Iran, the Trump administration has now enacted six rounds of sanctions targeting Iranian oil sales. A month ago, the first private refinery in China was sanctioned along with a terminal operator.

Today’s action added a second Shandong Provence-based refinery, Shandong Shengxing Chemical Company, to the sanctions. OFAC reports the refinery has received “dozens of shipments of Iranian crude oil worth more than a billion dollars.” According to the statement, between March 2020 and January 2023, Shandong Shengxing sent more than $800 million in wire transfers to China Oil and Petroleum Company Limited (COPC), an IRGC-QF front company that aided in selling Iranian oil to China. COPC the U.S. says laundered billions of dollars through the U.S. financial system in support of the IRGC-QF, $108 million of which was seized by the U.S. Justice Department.

“Any refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran’s oil trade places itself at serious risk,” said Secretary of the Treasury Scott Bessent. “The United States is committed to disrupting all actors providing support to Iran’s oil supply chain, which the regime uses to support its terrorist proxies and partners.”

The action is also adding five tankers to the sanctions, including one flagged in Cameroon (Reston – 115,482 dwt) and four flagged in Panama (Bestla -306,206 dwt; Egret – 299,868 dwt; Nyantara – 113,033 dwt; and Rani – 107,123 dwt). According to the U.S., the vessels have been involved in ship-to-ship transfers with sanctioned tankers and shipped billions of dollars worth of Iranian oil, including to Chinese refineries. The U.S. also listed the associated shipping companies in Panama, Malaysia, Marshall Islands, and Hong Kong associated with these tankers.

The Islamic Republic News Agency yesterday reported that the Iranian Foreign Ministry expected a “second round of indirect talks with the United States” to take place in Oman on Saturday, April 19. Iran's Supreme Leader Ayatollah Ali Khamenei wrote on X that a first round of talks had already been executed.

The Trump administration says it will continue to pressure Iran into a new agreement. It has also increased the attacks on the Iranian-backed Houthis in Yemen all as part of the pressure campaign. However, it also confirmed that U.S. Middle East envoy Steve Witkoff spoke directly with Iranian Foreign Minister Abbas Araghchi. The White House termed the first discussions as "very positive” and “constructive."