By Pishtaz | 2025-03-27

The United States on March 20 sanctioned an oil refinery and its chief executive officer for purchasing and refining Iranian crude oil from vessels linked to the Houthis and Iran's Ministry of Defense of Armed Forces Logistics (MODAFL).

It was the fourth round of sanctions targeting Iranian oil sales announced since a renewed maximum pressure campaign against the Iranian regime began February 4, and the first US designation of a "teapot refinery."

"Teapot" refiners are private Chinese refineries that are the primary purchasers of Iranian oil.

"Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror," said US Treasury Secretary Scott Bessent.

"The United States is committed to cutting off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program."

The Shandong Shouguang Luqing Petrochemical Co., Ltd. refinery, in China's Shandong province, purchased millions of barrels of Iranian crude oil worth approximately half a billion dollars, the US Treasury said.

In mid-2022, the refinery was identified as a buyer of Iranian oil associated with the Iranian military and Iranian military forces.

The refinery received Iranian oil transported by shadow fleet vessels, some of which have been sanctioned for their role transporting Iranian petroleum linked to the Houthis and MODAFL, including the Mehle and the Kohana.

The refinery's chief executive officer and legal representative, Chinese national Wang Xueqing, also has been blacklisted.

'Shadow fleet'

Also sanctioned were 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s shadow fleet of tankers supplying teapot refineries like Luqing Petrochemical, the Treasury said.

In a concurrent announcement, the US State Department sanctioned the Huaying Huizhou Daya Bay Petrochemical Terminal Storage Co., Ltd., a crude oil and petroleum products storage terminal in the port of Huizhou in China.

"The terminal received and stored Iranian-origin crude oil onboard a blocked tanker," it said.

"Crude oil and petroleum products terminals based in China serve as the gateway for Iranian petroleum products to enter the Chinese market."

Iranian crude oil is transported to teapot refineries via a shadow fleet of vessels that usually engage in deceptive shipping practices, including automatic identification system (AIS) manipulation.

The eight sanctioned shadow fleet vessels are: Comoros-flagged Natalina 7; Panama-flagged Catalina 7, Aurora Riley and Viola; San Marino-flagged Montrose; Barbados-flagged Volans and Brava Lake; and unflagged Titan.

The companies sanctioned for operating in the petroleum sector of the Iranian economy are based in Hong Kong, Liberia, China, Seychelles, Panama and the British Virgin Islands.