The United States is moving to close remaining gaps in its sanctions regime against Iran, the Treasury Department said on Tuesday, escalating tensions with China by targeting financial channels linked to Iranian oil exports.
Banks and financial service providers could face penalties if they do business with so-called "teapot" refineries in China - small, independent facilities that buy discounted crude from sanctioned countries such as Iran and refine it into fuel.
Media reports estimate that around 90% of Iran's oil exports are currently directed to China.
US Treasury Secretary Scott Bessent said on X that the agency is targeting Iran's international financial infrastructure, including access to cryptocurrencies, its "shadow fleet" of vessels with concealed ownership, procurement networks for weapons, funding channels for allied militias in the Middle East and Chinese teapot refineries.
He said the measures had deprived Iran of billions of dollars in revenue, warning that any entity engaging in illicit trade with Tehran risked US sanctions.
Last week, the US sanctioned one of China's largest independent refiners over its dealings with Iran, drawing criticism from Beijing. China's Foreign Ministry said it would firmly defend the rights and interests of its companies.
As negotiations over a long-term resolution to the US-Iran conflict stall, both sides are increasingly applying economic pressure.
Iran has made the strategically important Strait of Hormuz for global oil and gas markets largely impassable through threats and attacks on tankers and cargo vessels. The US, in turn, has imposed sweeping sanctions and a naval blockade on Iran to cut off the leadership in Tehran from oil export revenues.
