The U.S. Treasury Department on Friday imposed sweeping sanctions on 40 shipping firms and vessels, as well as a Chinese oil refinery, in a widening crackdown on maritime business with the Iranian regime.
The majority of sanctioned vessels are either Chinese-linked operations or have a history of delivering crude oil to China as the ultimate destination.
It comes nearly a week after the dramatic seizure of the Touska, a sanctioned vessel bound for Iran that had stopped at a Chinese port known as a loading point for chemicals that could be used as rocket fuel precursors. President Donald Trump, speaking to CNBC on Monday, said U.S. authorities found “a gift from China” on the ship, “which wasn’t very nice.”
It also follows the seizure this week of two vessels — M/T Majestic and M/T Tifani — in the Indian Ocean, which U.S. officials say were carrying a combined load of nearly 4 million barrels of Iranian crude.
“Economic Fury is imposing a financial stranglehold on the Iranian regime, hampering its aggression in the Middle East, and helping to curtail its nuclear ambitions,” said Treasury Secretary Scott Bessent in a statement Friday on the new sanctions, which coincide with the war effort dubbed Operation Epic Fury.
The sanctions are the largest tranche of such measures targeting Iran’s shadow fleet since the war began.
It comes at a complex moment in U.S.-China relations, with Trump set to meet Chinese President Xi Jinping at a summit in Beijing next month. The meeting was already delayed from March because of the war in Iran.
The recent ship seizures have angered China, which has previously deemed such U.S. sanctions illegal, and this week condemned the “forcible interception” of the Touska.
China’s Foreign Ministry has sought to distance Beijing from the sanctioned vessels. “As far as I know, the vessel seized by the U.S. is a foreign container ship. China rejects any false association and speculation,” spokesman Guo Jiankun said. China’s embassy in Washington did not immediately respond to a request for comment.
China is the world’s largest buyer of Iranian crude and a key source of chemicals and hardware used in Tehran’s military. Analysts estimate that — before the war — China imported about 1.4 million barrels of Iranian oil a day, roughly 13 percent of its total imports, though the figures are not officially reported.
That trade flows through a shadow network of hundreds of tankers, shell companies and intermediaries operating outside normal legal channels, carried by vessels with obscured ownership and ship-to-ship transfers at sea, largely beyond the reach of sanctions enforcement. Much of the oil ends up at China’s “teapot” refineries — small processors that are more willing to take discounted, gray-market crude.
Among the groups targeted by the new sanctions is Hengli Petrochemical (Dalian) Refinery Co. Ltd., one of China’s largest teapot refineries. The U.S. Treasury Department said Friday that the group had purchased billions of dollars’ worth of Iranian petroleum.
Few Chinese vessels have crossed the Strait of Hormuz since the war began, under what Beijing confirmed was an agreement with Tehran. But since Trump imposed a U.S. blockade on ships entering and exiting Tehran’s ports, several Chinese-linked ships appear to have abandoned efforts to transit the strait, including the U.S.-sanctioned Rich Starry.
The U.S. has issued sanctions against hundreds of vessels, entities and individuals alleged to be part of Iran’s shadow fleet, but physical seizures of Chinese-linked vessels or cargo by U.S. forces are rare. Beijing, for its part, does not stop U.S.-sanctioned ships from entering its ports or doing business with Chinese entities. Analysts say actually seizing the dozens of sanctioned vessels involved in the shadow trade — like the Touska, which involved a six-hour standoff — would place a significant burden on the U.S. military.
“There aren’t many destroyers out there, there’s only so many of these that they can do, and they’ve got other missions,” said Isaac Kardon, a senior fellow at the Carnegie Endowment for International Peace.
U.S. authorities have vowed to continue widening their crackdown on the shadow networks facilitating Iran’s oil trade, and they say they will keep trying to disrupt the flow of Iranian crude.
“We will continue to relentlessly investigate, track and pursue these cases, using every lawful authority to hold sanctioned actors and those who support terrorism accountable, and to deny them any ability to profit from illicit maritime activity,” U.S. Attorney Jeanine Pirro said Thursday following the seizure of the M/T Majestic.
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