US imposes sanctions on companies it says sent Iranian oil to China

WASHINGTON: The U.S. Treasury Department on Tuesday imposed sanctions on more than 20 companies in a network that it said has long sent Iranian oil to China, days after negotiators from Iran and the United States concluded a fourth round of nuclear talks.

AI Brief

The US sanctioned companies helping Iran secretly ship oil to China, funding Iran's weapons and militant groups.
Several Chinese companies were penalised for aiding Irans oil trade by hiding its origin and managing shipments.
The sanctions aim to pressure both Iran and China, with hints the US may target larger entities like Chinese banks next.

The network facilitated the shipment of oil worth billions of dollars to China on behalf of Iran’s Armed Forces General Staff and its front company, Sepehr Energy, Treasury said. Washington designated Sepehr in 2023.

The U.S. sanctioned companies including CCIC Singapore PTE, which it said helped Sepehr by concealing the oil's Iranian origins and carrying out pre-delivery inspections required before oil was transferred to China. It also sanctioned Huangdao Inspection and Certification Co. Ltd for having assisted Sepehr with oil cargo inspection services to vessels that had already been sanctioned.

Treasury also sanctioned Qingdao Linkrich International Shipping Agency Co. Ltd, which it said has assisted Sepehr Energy-chartered vessels with arrivals and discharges at Qingdao Port as its designated port agent.

The sale of the oil helped fund the development of Iranian ballistic missiles and drones, nuclear proliferation, and attacks by the Houthi armed group on shipping in the Red Sea, the U.S. Navy and Israel, said the administration of President Donald Trump.

"The United States will continue targeting this primary source of revenue, so long as the regime continues its support for terrorism and proliferation of deadly weapons,” Treasury Secretary Scott Bessent said in a statement.

The Chinese embassy in Washington and the Iranian mission in New York did not immediately respond to requests for comment.

Tuesday's sanctions were the latest since Trump reinstated his "maximum pressure" campaign on Iran in February. The Trump administration earlier in the year had imposed sanctions on China's independent "teapot" oil refineries for processing Iranian oil.

The sanctions block U.S. assets of those designated and prevent Americans from doing business with them.

PRESSURE ON CHINESE BANKS

The measures imposed by the U.S. in recent months have boosted pressure on Iran and China, but analysts have said that to have broader impact on the oil exports, Washington would have to impose sanctions on bigger targets such as Chinese banks.

In what could be a step up in pressure, Treasury's Office of Foreign Assets Control imposed Tuesday's sanctions on the network under a counterterrorism authority.

Jeremy Paner, a partner at the law firm Hughes Hubbard & Reed and a former Treasury Department sanctions investigator, said the counterterrorism authority provides OFAC the flexibility to impose the kind of sanctions most likely to be used against large Chinese banks.

"I believe today’s actions are more about triangulation by exerting pressure on China to convince Iran to accept a deal" in the nuclear talks, Paner said. "Chinese banks have a relatively sophisticated understanding of how U.S. sanctions work. They know their risk exposure is quite high if they continue to bank companies sanctioned under the counterterrorism authority."

Tehran and Washington have both said they prefer diplomacy to resolve the decades-long nuclear dispute, but they remain deeply divided on several red lines including enrichment of uranium in Iran.