Washington on Wednesday blacklisted a China-based refinery and roughly 40 shipping firms and tankers it says moved more than $1 billion of Iranian crude — a move that landed as Tehran confirmed new nuclear talks in Rome. The Treasury Department's Office of Foreign Assets Control named Shandong Shengxing Chemical Co., a small independent 'teapot' refinery in Shandong province, and added multiple firms and vessels to its sanctions list while publishing guidance for maritime operators, insurers and banks on detecting sanction‑evasion tactics.

What Washington did

The Treasury Department's Office of Foreign Assets Control (OFAC) on Wednesday designated Shandong Shengxing Chemical Co., Ltd., a small independent "teapot" refinery in Shandong province, saying it received dozens of crude shipments from Iran worth more than $1 billion. Treasury warned that any refinery, company or broker that purchases Iranian oil or helps Iran's oil trade faces serious legal and financial risk.

Alongside the refinery designation, the US added multiple firms and vessels involved in the shipments to its sanctions list and published an updated advisory for maritime operators, insurers and banks to help detect sanction-evasion tactics. The advisory flagged practices such as ship-to-ship transfers, falsified cargo and vessel paperwork, complex ownership webs and the use of shell companies to hide origin and destination.

Treasury said some shipments were routed through a front company called China Oil and Petroleum Company Limited (COPC), which OFAC described as acting as a conduit for the Islamic Revolutionary Guard Corps–Qods Force. The designation statement said the refinery routed substantial funds to COPC between March 2020 and January 2023 and that COPC had laundered funds through international financial channels, including amounts later seized by the US Department of Justice.

Mastheads

How the shadow fleet operates

The notice reiterated longstanding US concerns about a so-called "shadow fleet": tankers that obscure the origin of Iranian crude by changing ship names, falsifying documents or conducting ship-to-ship transfers at sea. OFAC said such tactics let Iran sell oil at steep discounts and continue to earn revenue despite sanctions.

The maritime advisory sets out concrete due-diligence steps for industry participants, including:

  • Strengthen know-your-customer and know-your-vessel checks and scrutinise ownership and management arrangements.
  • Watch for suspicious AIS gaps, unexpected route changes and unexplained ship-to-ship transfers.
  • Verify cargo documentation against multiple sources and be alert to falsified paperwork.
  • Scrutinise complex ownership webs and common shell-company techniques used to disguise origin and destination.
  • Recognise that exposure extends beyond owners to managers, insurers, port service firms and banks.

Reactions and diplomatic timing

The sanctions arrived as Iran confirmed the next round of nuclear talks with the United States will take place in Rome, making the move diplomatically sensitive: Washington is applying economic pressure while preparing to engage Tehran on its nuclear programme.

China criticised the measures. A spokesperson at the Chinese embassy in Washington said the use of sanctions "undermines international trade order and rules, disrupts normal economic and trade exchanges, and infringes upon the legitimate rights and interests of Chinese companies and individuals."

A State Department spokesperson said the measures form part of broader efforts to hold Iran and partners in sanctions evasion accountable. Some reports also identified other Chinese buyers and larger refineries in the mix, and said roughly 40 shipping firms and tankers were included overall.

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This article was created with AI assistance.