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The U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced on Friday that it is imposing sanctions on a prominent Chinese oil refinery and numerous vessels associated with Iran’s so-called “shadow fleet.” This move is part of an intensified effort to cut off Tehran’s primary revenue stream.
According to a press release, the sanctions target Hengli Petrochemical, a significant purchaser of Iranian oil, along with a network of maritime companies and tankers involved in transporting billions of dollars of petroleum products to international markets.
The Treasury Department has labeled these “shadow fleet” ships as a crucial financial support system for Iran’s “unstable regime.”
This initiative is a component of Economic Fury, a comprehensive strategy aimed at squeezing Iran’s financial resources by restricting its oil exports. The U.S. argues that the revenue generated from these exports funds Iran’s military operations and destabilizing activities throughout the Middle East.
“Economic Fury is effectively tightening the financial grip on the Iranian regime, mitigating its aggressive actions in the Middle East and putting a check on its nuclear pursuits,” stated Treasury Secretary Scott Bessent.
An oil tanker near the terminal at Kharg Island, Iran, as U.S. officials and analysts consider whether seizing the island could significantly impact Iran’s oil exports. (Ali Mohammadi/Bloomberg via Getty Images)
Hengli Petrochemical (Dalian) Refinery Co. is a China-based “teapot” refinery, a term used for independent facilities known for purchasing discounted crude, including from sanctioned countries.
The refinery, one of China’s largest independent facilities, has received Iranian oil cargoes from sanctioned shadow fleet vessels since at least 2023. Hengli has also purchased oil tied to Iran’s armed forces, generating hundreds of millions of dollars for the Iranian military.
Hengli has also received shipments tied to Sepehr Energy Jahan Nama Pars Company, a firm identified by U.S. officials as a front for Iran’s armed forces that helps facilitate oil sales abroad.Â
The company operates on behalf of Iran’s Armed Forces General Staff, using a network of intermediaries and vessels to move sanctioned crude, with proceeds helping fund the country’s military programs and regional proxy groups.
The Iranian-flagged Touska cargo ship after U.S. forces launched missiles at its control room after its violation of the U.S. blockade in the Strait of Hormuz April 20, 2026.  (U.S. Central Command )
The new sanctions also target the network that makes these oil sales possible, a “shadow fleet” of aging tankers and shell companies that move petroleum across global markets while evading sanctions and obscuring the origin of shipments.
These ships avoid detection by transferring cargo from one tanker to another in the open ocean. Treasury officials said 19 vessels were targeted in the action.
A U.S. military helicopter hovers over the sanctioned stateless crude oil tanker M/T Tifani during an interdiction April 21, 2026. (Department of War)
The move is part of the Trump administration’s renewed “maximum pressure” campaign against Iran, aimed at cutting off the regime’s primary source of revenue through oil exports and sanctions enforcement.
U.S. officials say oil exports remain the backbone of Iran’s economy, and efforts to restrict those flows are designed to limit the government’s ability to fund its military, support proxy groups and advance its nuclear program.
Treasury officials warned that additional sanctions are likely as the U.S. continues targeting the networks, intermediaries and buyers that enable Iran to move oil on the global market.