In a major escalation of economic pressure, the U.S. Treasury Department has issued a stern warning to China regarding its continued purchase of Iranian crude oil.
The move specifically targets independent “teapot” refineries in Shandong Province which the U.S. claims are a financial lifeline for Tehran.
The Treasury’s Office of Foreign Assets Control (OFAC) recently designated several Chinese firms including Hengli Petrochemical for processing billions in Iranian oil.
Treasury Secretary Scott Bessent stated that the U.S. is prepared to deploy secondary sanctions against any financial institution facilitating this trade, noting:
“At President Trump’s direction, Treasury will continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets.”
He added that “any person or vessel facilitating these flows – through covert trade and finance – risks exposure to U.S. sanctions.”
In an unprecedented act of defiance, Beijing has ordered its refiners to ignore the U.S. mandates.
A spokesperson for China’s Ministry of Commerce defended the move telling state media the order was issued “to safeguard national sovereignty, security and interests,” while maintaining that they “opposed unilateral sanctions” that lack United Nations authorization.
This showdown comes just weeks before a high-stakes summit between President Trump and President Xi Jinping.
