- Beijing calls the measures “illegal” and vows to continue Iranian oil imports.
- The fourth round of sanctions aims to cut Tehran’s oil exports to zero.
- Washington avoids targeting major Chinese banks to prevent economic retaliation.
The United States on Thursday imposed new sanctions on Iran’s oil exports, including the first-ever U.S. sanctions against a Chinese teapot refinery that processes Iranian crude. This is the fourth set of sanctions on Iran’s oil industry since President Donald Trump re-imposed his maximum pressure campaign in February to reduce Iran’s oil exports to zero. The administration seeks to stop Tehran from pursuing nuclear weapons and supporting militant groups, reports Reuters.
First U.S. Sanctions on a Chinese Teapot Refinery
The U.S. Treasury Department sanctioned Shandong Shouguang Luqing Petrochemical Co., Ltd., a China-based teapot refinery. “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,” U.S. Treasury Secretary Scott Bessent said in a post on X.
The State Department confirmed that the U.S. had previously never sanctioned a teapot refinery. The Treasury Department, however, added Shandong Haiyou Petrochemical to its sanctions list in 2022. Representatives of the State and Treasury Departments did not make any additional comments on Friday morning.
China’s Response to U.S. Sanctions
China remains the largest importer of Iranian oil and does not recognize U.S. sanctions. Instead, it has built a trading system that uses the Chinese yuan and intermediaries to bypass the U.S. financial system.” China has always been firmly opposed to illegal and unjustifiable unilateral sanctions and so-called long-arm jurisdiction by the U.S.,” said a spokesperson for the Chinese embassy in Washington.
Earlier this month, China and Russia defended Iran after Washington pushed for nuclear talks, stating that discussions should be based on “mutual respect” and all sanctions should be lifted.
Minimal Pressure Strategy on China
Analysts suggest the U.S. is gradually increasing pressure on Iran while avoiding direct confrontation with China. “The strategy appears to target China as a means to pressure Iran – applying only minimal pressure for now while gradually increasing efforts to bring Iran to a nuclear deal,” said Scott Modell, CEO of Rapidan Energy.
The State Department also connected the sanctioned refinery to Iranian oil purchases from ships affiliated with Yemen’s Iran-aligned Houthi rebels and Iran’s Ministry of Armed Forces Logistics, both listed by the U.S. as terrorist organizations.
Additional Sanctions on Iranian Oil Trade
In addition to the teapot refinery, the U.S. Treasury sanctioned:
- 12 entities that take part in Iranian oil shipments
- Eight ships in Iran’s “shadow fleet” delivering crude to China
- Wang Xueqing, a refinery-linked individual, who has been added to the Specially Designated Nationals (SDN) list, preventing Americans from conducting business with him.
Blocked ships are the Panama-flagged Aurora Riley and Catalina, and the Barbados-flagged Brava Lake.
Sanctions on Chinese Oil Terminal
China’s Huaying Huizhou Daya Bay Petrochemical Terminal Storage was also sanctioned for purchasing and storing Iranian crude from a blacklisted ship.
The Biden administration has not signaled whether additional escalations against China’s involvement in Iran’s oil business are in the works. But analysts say that a more aggressive strategy such as going after major Chinese banks that are making transactions could prompt economic retaliation from Beijing.
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Source: Reuters
