On March 20, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated Shandong Shouguang Luqing Petrochemical Co., Ltd, a “teapot” oil refinery based in the People’s Republic of China (“PRC”), for allegedly purchasing millions of barrels of Iranian oil worth approximately half a billion dollars. OFAC also designated PRC national Wang Xueqing, the company’s chief executive officer and legal representative. In addition, OFAC sanctioned 19 entities and vessels that are part of Iran’s “shadow fleet” of tankers that allegedly helped teapot refineries ship millions of barrels of Iranian oil. According to OFAC, some of the sanctioned entities and vessels are linked to the Houthis, a Foreign Terrorist Organization, and the Iranian Ministry of Defense of Armed Forces Logistics (”MODAFL”). OFAC reported that this is the fourth round of sanctions issued in accordance with National Security Presidential Memorandum 2, which orders a campaign of maximum pressure on Iran.
These designations were imposed pursuant to Executive Order 13902, which enables the imposition of sanctions on key sectors of Iran’s economy, including the petroleum sector. As a result of these designations, all property and interests in property of the designated persons within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.
The U.S. Department of State also concurrently designated one entity – Huaying Huizhou Daya Bay Petrochemical Terminal Storage Col, Ltd – under section 3(a)(ii) of EO 13846, for knowingly engaging in a significant transaction for the purchase, acquisition, sale, transport or marketing of petroleum or petroleum products from Iran.
U.S. Department of Treasury Press Release | U.S. Department of State Fact Sheet