U.S. Sanctions Shandong Shengxing Refinery and Shadow Fleet Vessels Over $1 Billion Iranian Oil Trade

The U.S. Department of the Treasury has imposed new sanctions targeting Iran's oil industry, focusing on Chinese importers of Iranian oil. These sanctions include a China-based independent 'teapot' refinery, Shandong Shengxing Chemical Co., Ltd., which purchased over $1 billion worth of Iranian crude oil, including from a front company linked to Iran's Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). Shandong Shengxing sent more than $800 million to China Oil and Petroleum Company Limited (COPC), an IRGC-QF front company, which laundered billions through the U.S. financial system, with $108 million seized by the U.S. Justice Department. In addition to the refinery, the sanctions extend to several shipping companies and oil tankers involved in facilitating the transport of Iranian oil to China via a 'shadow fleet' that conducts ship-to-ship transfers. The targeted vessels include the Cameroon-flagged RESTON, and the Panama-flagged BESTLA, EGRET, NYANTARA, and RANI. These measures are part of a broader strategy to disrupt Iran's petroleum supply chain, which the U.S. claims is used to fund terrorist activities. The sanctions were announced under Executive Order 13902, targeting Iran's petroleum and petrochemical sectors, and mark the sixth round of actions against Iranian oil sales since the reimposition of stringent measures by President Donald Trump under National Security Presidential Memorandum 2. The U.S. Treasury Secretary Scott Bessent emphasized the serious risk faced by any entity engaging in the trade of Iranian oil. An updated sanctions advisory has been issued to assist the global shipping and maritime industry in identifying and avoiding sanctions evasion practices related to Iranian petroleum products.