U.S. Levies Sanctions Against Chinese Oil Storage Terminal for Iranian Oil Purchases

Latest Developments

• State Department Sanctions Chinese Oil Facility: The U.S. State Department has sanctioned a China-based crude oil storage terminal for receiving “at least eight Iranian crude oil cargos in the past several years.” According to a State Department fact sheet, the Guangsha Zhoushan Energy Group “knowingly engaged in a significant transaction for the acquisition of crude oil from Iran,” with shipments transported by previously U.S.-sanctioned tankers between 2021 and 2025. In addition, the sanctions targeted three vessel management companies “for their involvement in the transport of Iranian petroleum,” while the U.S. Treasury Department levied congruent sanctions against United Arab Emirates- and India-based entities, blocking around 30 vessels involved in shipping Iranian oil.
• Linked to Teapot Refinery: The sanctioned oil facility operated by Guangsha Zhoushan is connected by a pipeline to a privately owned Chinese oil company known as a “teapot refinery.” These independent refineries represent the largest purchasers of Iranian oil, providing a crucial economic lifeline to the Islamic Republic. On March 20, the U.S. Treasury Department sanctioned another “teapot” refinery as part of the Trump administration’s broader effort to disrupt “the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program,” according to Treasury Secretary Scott Bessent.
• Sanctions Come Ahead of Oman Talks: The April 10 sanctions came two days in advance of high-level talks in Oman between the United States and Iran aimed at initiating negotiations over Tehran’s nuclear program. President Donald Trump sent a letter to Iranian Supreme Leader Ayatollah Ali Khamenei on March 5 giving Tehran 60 days to reach a nuclear deal with the United States. Since then, Trump has stated that while “doing a deal would be preferable,” military action remains an option if negotiations fail.

FDD Expert Response

“China is coming under increased pressure for supporting Iran’s illicit oil economy. Beyond the nominally independent teapots and related infrastructure, U.S. sanctions should also target the Chinese Communist Party officials, regulators, and state-owned entities responsible for facilitating these dealings. Make no mistake, CCP officials are implicated in the flow of Iranian oil and that presents a significant sanctions risk for officials in Beijing. China must either abandon its support for Iran’s illicit oil economy or face a wave of increasingly isolating sanctions.” — Max Meizlish, Senior Research Analyst

“China’s purchases of Iranian crude directly fuel Tehran’s attacks against Israel and the United States while showcasing the strength of an emerging ‘Axis of Aggressors’ bent on undermining U.S. national security.” — Jack Burnham, Research Analyst

FDD Background and Analysis

“‘These Tankers Were Iranian’: Baghdad Accuses Tehran of Forging Iraqi Documents to Evade Oil Sanctions,” FDD Flash Brief

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

“Crushing Iran’s oil trade: The path to maximum pressure,” by Mark Dubowitz and Saeed Ghasseminejad

“U.S. Sanctions Should Target Tehran’s Top Economic Operatives,” by Saeed Ghasseminejad