“Teapot” is an industry term for small independent oil refineries.
The U.S. Treasury Department said in a statement that the action will increase pressure on Chinese oil importers as Trump tries to resume “maximum pressure” campaign on Iran, including efforts to reduce its oil exports to zero.
The action comes as the Trump administration negotiated its nuclear program this month, held talks in Oman last weekend and expected a second round of negotiations in Rome this weekend.
The Treasury Ministry said on Wednesday it imposed sanctions on China’s independent “tea pot” refinery, accused of playing a role in buying more than $1 billion worth of Iranian crude. So far, this is the second independent Chinese refinery approved by the Trump administration.
The United States has not focused on Chinese teapot refineries in the past, partly because they have little to no U.S. financial system. China’s state-owned oil companies have stopped buying Iranian crude oil due to concerns about sanctions. Washington has also imposed additional sanctions on several companies and ships, which it said promotes Iranian oil transport as part of its “shadow fleet”. Iran did not immediately respond to requests for comment on the mission of the United Nations and China in the Washington embassy.
China does not recognize US sanctions and is also the largest importer of Iran’s oil. China and Iran have established a trading system that uses Chinese yuan and a network of middlemen, avoiding US dollar and contacts with U.S. regulators.
“Any refinery, company or broker that chooses to buy Iranian oil or promote Iranian oil trade is at serious risk,” Finance Minister Scott Bessent said in a statement.
“The United States is committed to undermining all actors who support Iran’s oil supply chain, and the regime uses it to support its terrorist agents and partners.”
Transportation Guide
Wednesday’s Treasury Ministry also updated its guidance on transport and maritime stakeholders to “detect and mitigate Iran’s oil sanctions evasion”, warning that Iran relies on a massive shadow fleet to cover up oil transport.
The Treasury Ministry said it was the sixth round of sanctions against Iran’s oil sales as Trump resumed his “maximum pressure” campaign on Iran, which included efforts to lower its oil exports to zero to help prevent Tehran from developing nuclear weapons.
During his first 2017-2021 term, Trump pulled out U.S. uranium enrichment activities from a 2015 agreement between Iran and the world’s major powers in exchange for sanctions relief. Trump has also reimposed full sanctions.
Since then, Iran has exceeded the agreement’s limit on uranium enrichment.
Western powers accuse Iran of having a secret agenda to develop nuclear weapons capabilities by enriching uranium to high levels of fission purity, which is more than they say, and that is reasonable for civilian atomic energy programs. Tehran said its nuclear program was entirely out of civilian power.
“All sanctions will be fully enforced under the most pressure campaign of the Trump administration on Iran,” State Department spokesman Tammy Bruce said in another statement Wednesday.
“As long as Iran tries to generate oil revenue to fund its unstable activities, the United States will put Iran and all its partners in evading responsibility in sanctions.” (Reports by Daphne Psaledakis, Sarah Morland and Katharine Jackson; Other reports by Michael Martina; Editng by Doina Chiacu, David Chiacu, David Holmes and Cynthia Osterman)
