The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is sanctioning Shandong Shengxing Chemical Co., a “teapot” refinery company in China for its role in purchasing more than $1 billion worth of Iranian crude oil through “shadow fleets.”
Shandong Shengxing Chemical is an independent teapot refinery in Shandong Province that has received dozens of shipments of Iranian crude oil worth more than a billion dollars from shadow fleet vessels. Some of the vessels have been sanctioned for their role transporting Iranian petroleum.
Between March 2020 and January 2023, Shandong Shengxing sent more than $800 million in wire transfers to China Oil and Petroleum Company Limited (COPC). According to Treasury, COPC was an Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) front company that aided in selling Iranian oil to China.
Treasury alleges that COPC laundered billions through the U.S. financial system in support of the IRGC-QF, $108 million of which was seized by the U.S. Justice Department.
“Any refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran’s oil trade places itself at serious risk,” Secretary of the Treasury Scott Bessent said. “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.”
OFAC is also designating Oceanic Orbit Inc., Pro Mission SDN BHD, Bestla Company Limited, Dexiang Shipping, Civic Capital Shipping, and Starboard Shipping pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy.
As a result of the sanctions, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons.
The actions are being taken pursuant to Executive Order (E.O.) 13902, which targets Iran’s petroleum and petrochemical sectors. This is OFAC’s second action against a teapot refinery that has purchased Iranian crude oil. Further, this marks the sixth round of sanctions targeting Iranian oil sales since the President issued National Security Presidential Memorandum 2 instituting a campaign of maximum economic pressure on Iran.