The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued sweeping U.S. sanctions on Iranian oil networks, targeting the China-based Hengli Petrochemical (Dalian) Refinery Co., Ltd. and approximately 40 shipping firms and vessels. The action is designed to disrupt the “shadow fleet” and the independent refineries that provide a financial lifeline to the Iranian regime.
- Hengli Petrochemical: China’s second-largest “teapot” refinery, sanctioned for purchasing billions of dollars in Iranian petroleum.
- Shadow Fleet Crackdown: 19 vessels and 19 associated firms were designated for transporting Iranian crude, LPG, and petrochemicals.
- Broad Campaign: Since February 2025, the U.S. has sanctioned over 1,000 Iran-related persons, vessels, and aircraft.
Impact of U.S. Sanctions on Iranian Oil Networks
Hengli Petrochemical (Dalian) Refinery Co., Ltd. has emerged as one of Tehran’s most valued customers. As a leading independent “teapot” refinery, Hengli has purchased billions of dollars’ worth of Iranian oil products since at least 2023.
Treasury officials noted that Hengli has received cargoes from sanctioned shadow fleet vessels, including BIG MAG, GALE, and ARES, which collectively delivered over five million barrels of crude oil.
The refinery is also accused of fueling Iran’s military. It has received shipments overseen by Sepehr Energy Jahan Nama Pars Company, the oil sales arm of Iran’s Armed Forces General Staff, generating hundreds of millions of dollars for the Iranian military.
Targeting the Iranian Shadow Fleet
OFAC sanctioned 19 shadow fleet vessels that facilitate the movement of Iranian energy products to foreign markets. These vessels transported billions of dollars’ worth of crude oil, liquefied petroleum gas (LPG), and other petrochemicals.
Key vessels designated include the Panama-flagged LISBOA, which transported 2.5 million barrels of naphtha to the UAE, and the Vanuatu-flagged SEEKER 8, which delivered over four million barrels of crude oil to China between January and February 2026.
Other targeted vessels include the Barbados-flagged ZHEN ZHU and BANGUS, and the Comoros-flagged GOLDEN SUNRISE, all of which transported millions of barrels of oil to China throughout 2025.
The “Economic Fury” Campaign
“Economic Fury is imposing a financial stranglehold on the Iranian regime, hampering its aggression in the Middle East, and helping to curtail its nuclear ambitions,” said Secretary of the Treasury Scott Bessent.
The sanctions were issued under Executive Order (E.O.) 13902 and are in furtherance of the National Security Presidential Memorandum 2 (NSPM-2). This framework underpins the campaign of maximum economic pressure against sanctions evasion and money laundering networks.
All property and interests in property of the designated persons within the U.S. or under U.S. control are now blocked. Transactions involving these blocked persons are generally prohibited unless authorized by OFAC, with violations potentially resulting in civil or criminal penalties.
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