U.S. Treasury Targets Network Supporting Iranian Oil Exports

The U.S. Treasury's Office of Foreign Assets Control (OFAC) has taken a significant step in its campaign to disrupt Iran's oil revenue streams by imposing sanctions on a network of entities and vessels involved in the illicit export of Iranian crude oil. This move, part of a broader strategy to cut off the primary economic lifeline of the Iranian regime, targets key players in the shadow fleet of tankers and teapot refineries that facilitate the flow of Iranian oil to global markets.

The sanctions, announced on March 22, 2025, designate Shandong Shouguang Luqing Petrochemical Co., Ltd (Luqing Petrochemical), a teapot refinery in Shandong Province, for purchasing millions of barrels of Iranian oil worth approximately half a billion dollars. The refinery received Iranian oil transported by shadow fleet vessels, some of which have been sanctioned for their role in transporting Iranian petroleum linked to the Foreign Terrorist Organization, Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics (MODAFL).

The sanctions also target 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, including the Comoros-flagged NATALINA 7, Panama-flagged CATALINA 7, and San Marino-flagged montrose. These vessels are part of Iran’s “shadow fleet” of tankers that engage in deceptive shipping practices, such as automatic identification system (AIS) manipulation, to disguise the origin and destination of Iranian oil shipments.

The strategic motivations behind these sanctions are clear. The U.S. aims to cut off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program. As Secretary of the Treasury Scott Bessent stated, "Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror." By targeting these entities, the U.S. seeks to disrupt the illicit trade that supports Iran's destabilizing activities in the Middle East and beyond.

The effectiveness of these sanctions in disrupting Iran's oil revenue streams can be seen in the specific targets and actions taken. For instance, the designation of Luqing Petrochemical and its CEO, Wang Xueqing, pursuant to E.O. 13902, is a direct attempt to disrupt a significant portion of Iran's oil revenue. The sanctions on shadow fleet vessels and their associated entities further underscore the U.S.'s commitment to targeting Iran's illicit shipping practices.

Additionally, the sanctions on HUAYING HUIZHOU DAYA BAY PETROCHEMICAL TERMINAL STORAGE CO., LTD (HUAYING PETROCHEMICAL) for knowingly engaging in a significant transaction for the acquisition of crude oil from Iran highlight the U.S.'s efforts to target the entire supply chain of Iranian oil exports. HUAYING PETROCHEMICAL received approximately one million barrels of Iranian-origin crude oil at its terminal, which was offloaded from the U.S.-designated tanker NICHOLA. This action is likely to disrupt the flow of Iranian oil into China, one of the largest importers of Iranian crude oil and petroleum products.



The sanctions also target Iran's Minister of Petroleum, Mohsen Paknejad, who oversees the export of tens of billions of dollars’ worth of Iranian oil and has allocated billions of dollars’ worth of oil to Iran’s armed forces for export. This move is part of a broader effort to target the individuals and entities responsible for Iran's oil exports and to disrupt the revenue streams that support the regime's destabilizing activities.

In conclusion, the U.S. Treasury's decision to target the network supporting Iranian oil exports is a strategic move to cut off the primary economic lifeline of the Iranian regime. The sanctions on teapot refineries, shadow fleet vessels, and key individuals involved in the illicit trade of Iranian oil are likely to be effective in disrupting Iran's oil revenue streams and achieving the U.S.'s strategic objectives. As the campaign of maximum pressure on Iran continues, these sanctions send a clear message to the regime and its supporters that the U.S. is committed to cutting off the revenue streams that enable Tehran's destabilizing activities.

Ask Aime: What is the historical significance of the U.S. Treasury's sanctions against Iran's oil revenue streams, and how do they affect the global market and Iran's economy?