U.S. Targets Chinese “Teapot” Refinery in Trump’s Iran Sanctions

The United States has escalated its economic war on Iran by sanctioning a Chinese “teapot” refinery and a network of oil traders.

This marks the fourth wave of penalties since President Donald Trump relaunched his “maximum pressure” campaign in February. Shandong Shouguang Luqing Petrochemical Co., Ltd., located in China’s Shandong province, faces U.S. wrath for purchasing $500 million worth of Iranian crude.

This highlights Beijing’s role as Tehran’s top oil buyer. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) also hit the refinery’s CEO, Wang Xueqing, 19 shipping entities, and a Chinese oil terminal tied to Iran’s “shadow fleet,” including vessels like the Panama-flagged Aurora Riley.

Treasury Secretary Scott Bessent called these deals “the primary lifeline” for Iran, accused of funding terrorism and nearing nuclear capability. The sanctions link the oil to Iran’s military and Yemen’s Houthi rebels, recently labeled terrorists by Washington.

Trump’s February 4 memorandum aims to crush Iran’s oil exports, block its nuclear ambitions, and cut funds to regional proxies. “Iran cannot have a nuclear weapon—they’re too close,” he said. Bessent vowed to “close down Iran’s oil industry” and sever its global financial ties, building on earlier sanctions against Iran’s Oil Minister Mohsen Paknejad.

Oil markets twitched—WTI rose 1.8% to $68.38, Brent to $72.06—yet Iran’s exports hit 1.82 million barrels daily in February, with China taking 1.43 million. The sanctions challenge this resilience, but Iran’s shadow fleet and China’s teapot refiners have long dodged U.S. pressure.

Targeting China risks straining ties with Beijing while bolstering U.S. allies like Israel and Gulf states. Success, however, hinges on breaking a stubborn Iran-China trade bond—leaving Trump’s high-stakes gamble hanging in the balance.