Treasury Imposes Sanctions on Iranian Military-Affiliated Network Smuggling Oil to China

Latest Developments

• Iranian Oil Shipped to China: The United States issued fresh sanctions on more than 20 companies accused of shipping sanctioned Iranian oil to China, Tehran’s largest customer. The main target of this round of sanctions is Sepehr Energy, a commercial affiliate of the Iranian Armed Forces General Staff, which established multiple front companies to facilitate Iran’s oil trade to Chinese “teapot” refineries — small, independent operations. Sepehr’s revenue contributed billions of dollars to the budget of Iran’s armed forces, helping them develop and produce ballistic missiles and drones and finance regional terrorist groups. 
• Documents Falsified to Hide Shipments: The U.S. Treasury Department also sanctioned several companies that “obfuscated” Iran’s oil shipments, “typically through numerous ship-to-ship transfers, oil blending, and document falsification.” In late 2024, one company, CCIC Singapore, provided inspection services during ship-to-ship transfers for 2 million barrels of oil from a sanctioned vessel affiliated with Sepehr. In mid-2024, CCIC provided inspection services for another sanctioned vessel, likely providing falsified documents that concealed the vessel’s identity and certified its Iranian oil cargo as Malaysian heavy crude oil.
• ‘Drive Iranian Oil Exports to Zero’: Speaking at the Saudi-U.S. Investment Forum in Saudi Arabia on May 13, President Donald Trump said that if Iran rejects ongoing nuclear deal negotiations with the United States, he would have “no choice but to … drive Iranian oil exports to zero” as part of his administration’s “maximum pressure” campaign against Iran. Despite U.S. sanctions, Iran is currently exporting 1.6 million barrels of oil per day, significantly higher than the 600,000 barrels per day during Trump’s first term.

FDD Expert Response

“Billions of dollars’ worth of Iranian oil is flowing to China. The Trump administration’s ‘maximum pressure’ campaign is drawing attention to this fact, but more aggressive and escalatory enforcement is necessary to change market conditions in China. The solution? Targeted sanctions aimed at the banks and trading houses in China, Malaysia, Singapore, and elsewhere that are facilitating these deals. Follow the money and target its chokepoints.” — Max Meizlish, Senior Research Analyst

“Washington’s message to Tehran and Beijing must be clear: it will do whatever it takes to break the backbone of the Iran-China illicit oil trade. By expanding the scope of its sanctions, the United States is tightening the screws in an effort to curb Iran’s oil exports — which have so far proven resilient primarily due to the Chinese Communist Party’s continued support.” — Saeed Ghasseminejad, Senior Iran and Financial Economics Advisor

“China continues to offer a financial lifeline to Iran, purchasing Tehran’s crude while allegedly supplying its proxies with weapon components. To maintain maximum pressure on the regime, Washington must continue to cut all ties between Iranian oil wells and Chinese refineries.” — Jack Burnham, Research Analyst

FDD Background and Analysis

“U.S. Imposes Third Round of Sanctions on Chinese ‘Teapot’ Refineries Importing Iranian Oil,” FDD Flash Brief

“How to Disrupt the China-Iran Oil Trade,” by Saeed Ghasseminejad and Matthew Zweig

“Maximum Pressure on Tehran Regime in Motion as Trump Builds Negotiating Leverage,” by Janatan Sayeh and Behnam Ben Taleblu

“U.S. Levies Sanctions Against Chinese ‘Teapot’ Oil Refineries for Iranian Oil Purchases,” FDD Flash Brief