US sanctions Chinese oil terminal in new measures targeting Iranian oil trade

The US issued a suite of new sanctions May 1 targeting the Iranian oil trade, including a measure blocking the Qingdao Haiye Oil Terminal in China's Shandong province for receiving tens of millions of barrels of Iranian crude in 2025.

In addition to sanctioning the oil terminal, the State Department sanctioned Xinchun Li, the president of Qingdao Haiye, according to a May 1 statement. The Treasury Department issued a license giving entities until May 31 to wind down transactions with the terminal.

The State Department also sanctioned two vessel management companies -- Thriving Times International and Onboard Ship Management – as well as the tanker New Fusion, which has loaded Iranian petroleum products.

At the same time, the Treasury Department's Office of Foreign Assets Control sanctioned three Iranian foreign currency exchange houses and 13 front companies to further disrupt Iran's mechanisms for receiving payments for oil and other commodities.

"Because Iran primarily settles its oil sales in Chinese yuan, these exchange houses play a critical role in converting oil revenues into currencies that are more readily usable by the Iranian military and its partners and proxies," Treasury said in a statement.

The newly sanctioned exchange houses are Pedram Pirouzan and Associates Partnership Company, Nasser Ghasemi Rad and Associates Partnership Company and Tahayyori and Associate Partnership Company.

Treasury also sanctioned four individuals who own the exchange houses or the front companies linked to the exchanges. The exchange houses take advantage of high-risk jurisdictions with inadequate money laundering countermeasures to establish front companies and exploit the international financial system, Treasury said.

Treasury also issued a May 1 alert noting that paying Iran a toll for safe passage through the Strait of Hormuz poses sanctions risks, regardless of payment method. Iranian demands may include payment options such as fiat currency, digital assets, offsets, informal swaps, or charitable donations, the alert said.

Treasury also warned maritime service providers to conduct enhanced due diligence on any vessels attempting to transit the strait to ensure they have not engaged in any sanctionable conduct involving Iran, including the payment of safe passage fees.

The new measures follow a series of other recent sanctions targeting Iranian shadow banks, tankers and a Chinese independent refinery involved in the Iranian oil trade. The Treasury Department has also warned financial institutions to increase their due diligence to ensure compliance with US sanctions on Iran.

Vessel traffic through the Strait of Hormuz dipped to 12 on April 30 from 15 the previous day, as a US naval blockade continued to disrupt crude oil flows from the Persian Gulf, according to a May 1 report from S&P Global Commodities at Sea.

According to CAS estimates, around 24.8 million barrels of Iranian crude moved outside the strait in April, compared with 44.8 million barrels in March.