The Scoop
The Treasury Department on Tuesday will direct financial institutions to keep additional distance from transactions on behalf of Chinese “teapot” oil refineries, independent facilities that play a key role in importing and refining Iranian fuel.
Treasury’s Office of Foreign Assets Control has already imposed sanctions on five of China’s teapot refineries: Shandong Shouguang Luqing Petrochemical, Shandong Shengxing Chemical, Hebei Xinhai Chemical, Shandong Jincheng Petrochemical, and Hengli Petrochemical Refinery, per Tuesday’s guidance.
That guidance, shared first with Semafor, now urges banks and others to “conduct enhanced due diligence” when dealing with the teapots or other firms that could be helping Iran send its oil to China. It warns specifically of “front companies” that Iran has used to “broker shipments” and accept payments, as well as the country’s so-called “shadow fleet” that it says “regularly engage[s] in deceptive shipping practices.”
The guidance also suggests the financial institutions weigh communicating with Chinese banks “about sanctions risks” and “gathering additional information on relevant customers and transactions.”
Know More
The guidance is part of a broader push by Treasury — dubbed “Economic Fury,” a play on the military’s “Operation Epic Fury” — to exert maximum economic pressure on Iran as President Donald Trump looks to resume full-scale negotiations that could wind down the US’ war.
Though officials renewed a waiver of sanctions on Russian oil earlier this month, Treasury Secretary Scott Bessent has said it won’t be renewed again; the department decided to let a similar waiver of sanctions on Iranian oil lapse.
Bessent said at a White House press briefing earlier this month that he’d sent letters to Chinese banks warning of secondary sanctions if they facilitate transactions with Iran. He warned earlier this week that Treasury is prepared to sanction anyone who conducts business with Iranian airlines.
Notable
- The Trump administration is taking still more steps as part of its broader push to limit Chinese trade with Iran, The Washington Post reported.