US places sanctions on Chinese refinery over Iran oil purchases

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The Trump administration has imposed sanctions on a Chinese refinery for buying Iranian crude oil, as Washington increasingly pushes Beijing to rein in oil purchases from the country to increase the pressure on Tehran.

The Treasury department targeted Shandong Shengxing Chemical for allegedly buying more than $1bn in Iranian crude oil from sources that included a front company for Iran’s Islamic Revolutionary Guard Corps in violation of US sanctions.

The measure marks the second time in a month that President Donald Trump has put sanctions on a “teapot” refinery — a term for independent Chinese refineries that are the main buyers of Iranian crude.

“Any refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran’s oil trade places itself at serious risk,” said Treasury secretary Scott Bessent.

“The United States is committed to disrupting all actors providing support to Iran’s oil supply chain, which the regime uses to support its terrorist proxies and partners,” he added.

The Treasury department also imposed sanctions on several companies and vessels for helping Iran transport oil to China on ships that are part of a “shadow fleet” of vessels that seek to avoid detection.

The package marked the sixth round of sanctions that Trump has placed on Iran as part of his “maximum pressure campaign”.

They come as Washington and Beijing are in the middle of a trade war that Trump launched in January and escalated in recent weeks. The US has imposed a 145 per cent tariff on imports from China, which has retaliated with a 125 per cent tariff on American goods.

The Trump administration has also stepped up pressure on China over its purchases of Iranian crude. The Biden administration was criticised by Republicans for failing to exert more pressure on Beijing to stop importing oil from Iran in violation of US sanctions.

Dennis Wilder, who was a White House Asia adviser to president George W Bush, said former president Joe Biden “turned a blind eye to China’s purchase of up to 90 per cent of Iran’s oil exports”.

“This was, in large part, out of concern that a fully enforced embargo on Iran would lead to a sharp rise in oil prices that would affect US consumers,” Wilder said. “Chinese oil purchases have helped build a close relationship between Tehran and Beijing in which China benefits by gaining greater commercial access in the region.”

The new sanctions come as the Trump administration is holding talks with Tehran on curtailing the Islamic republic’s nuclear programme, prompting hopes of a breakthrough in one of the Middle East’s most intractable problems.

Steve Witkoff, Trump’s special envoy, held indirect talks with Iranian foreign minister Abbas Araghchi in Oman on Saturday. The pair are due to hold a second round of talks this coming Saturday.

“We firmly oppose the US abuse of unilateral sanctions and ‘long-arm jurisdiction,’ which undermines international trade order and rules, disrupts normal economic and trade exchanges, and infringes upon the legitimate rights and interests of Chinese companies and individuals,” said Liu Pengyu, the Chinese embassy spokesperson in Washington.