The United States has issued a fresh round of sanctions on Iran’s oil industry, targeting, once again, Chinese importers. More specifically, the Department of the Treasury added an independent Chinese refiner to its list of sanctioned entities for buying crude from Iran.
“The Treasury’s Office of Foreign Assets Control (OFAC) is designating a China-based independent “teapot” refinery Shandong Shengxing Chemical Co., Ltd., for its role in purchasing more than a billion dollars’ worth of Iranian crude oil, including from a front company for Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF),” Treasury said in a news release.
“OFAC is also imposing additional sanctions on several companies and vessels responsible for facilitating Iranian oil shipments to China as part of Iran’s “shadow fleet,” the department also said.
The Trump administration has stepped up pressure on Iran’s government through sanctions ever since President Trump took office, seeking to use them as a means of forcing Tehran to give up plans for developing a nuclear weapon.
The sanction push has been bullish for oil prices due to its potential to reduce Iranian oil flows abroad, with Rystad Energy warning in March that the sanctions targeting Chinese oil buyers could disrupt global oil markets.
The ultimate goal of the sanctions is to reduce Iran’s oil exports to zero, as stated by President Trump in a February directive to the State Department. The president directed the Secretary of State to “implement a robust and continual campaign, in coordination with the Secretary of the Treasury and other relevant executive departments or agencies, to drive Iran’s export of oil to zero, including exports of Iranian crude to the People’s Republic of China.”
Meanwhile, despite the stricter sanction enforcement, China’s March oil imports hit a 20-month high on stronger flows from Russia and Iran. Imports from Iran specifically rose to a record 1.8 million barrels daily.
Source: By Irina Slav from Oilprice.com