The U.S. Treasury Department announced on Thursday its first financial sanctions under President Donald Trump’s administration, targeting an “international network” involved in transporting Iranian oil to China. According to the Treasury’s statement, this network has been responsible for facilitating the shipment of millions of barrels of Iranian crude oil, valued at hundreds of millions of dollars, to the People’s Republic of China.
These oil shipments were conducted on behalf of Iran’s Armed Forces General Staff and a sanctioned entity known as Sepehr Energy Jahan Nama Pars. The sanctions affect individuals and companies in several countries, including China, India, and the United Arab Emirates.
Furthermore, the Treasury imposed blocking sanctions on two tankers—the Panama-flagged CH Billion and the Hong Kong-flagged Star Forest—due to their role in transporting Iranian oil to China. According to U.S. officials, these vessels “onboarded” Iranian crude from storage facilities in China as part of a scheme that benefited Iran’s military through oil sales.
State Department spokesperson Tammy Bruce emphasized that the objective of these sanctions is to “disrupt illicit funding streams” that finance Iranian armed forces and U.S.-designated foreign terrorist organizations, including Hamas and Hezbollah.
“We will use all tools at our disposal to hold the regime accountable for its destabilizing activities and pursuit of nuclear weapons that threaten the civilized world,” Bruce stated.
Reports indicate that Iranian petroleum exports reached record levels in the first quarter of 2024, with the vast majority destined for China. An investigation published by The Economist in October 2024 estimated that Iran’s petroleum and petrochemical sales generated up to $70 billion in 2023.
The rising volume of Iranian oil imports by China suggests that PRC-based buyers may believe the financial advantages of purchasing Iranian petroleum outweigh the risks posed by U.S. sanctions. Iranian petroleum is often sold at lower prices than the prevailing market rates, reportedly at a discount compared to Persian Gulf or price-capped Russian suppliers, making it attractive to foreign traders.
Most PRC-based buyers are reportedly small, semi-independent refineries known as “teapots.” According to one advocacy group, these refineries are “both hard to uncover and not exposed to the U.S. financial system,” which limits the effectiveness of U.S. sanctions. Traders are also said to employ deceptive practices such as relabeling Iranian-origin petroleum and falsifying tanker route data.
“The Iranian regime remains focused on leveraging its oil revenues to fund the development of its nuclear program, to produce its deadly ballistic missiles and unmanned aerial vehicles, and to support its regional terrorist proxy groups,” Treasury Secretary Scott Bessent stated.
“The United States is committed to aggressively targeting any attempt by Iran to secure funding for these malign activities,” he added.
