The U.S. Treasury warned financial institutions Tuesday that they could face sanctions if they engage in dealings with Chinese refineries that process Iranian oil.
The Treasury urged financial institutions in a statement to avoid facilitating transactions involving independent refineries, known as “teapots,” that import Iranian oil, as such transactions may expose them to sanctions.
China purchases approximately 90% of Iran’s oil exports, the Treasury noted, with teapot refineries accounting for the majority of these imports.
“This revenue ultimately benefits the Iranian regime, its weapons programs, and its military. Some Chinese teapot refineries have used the U.S. financial system to conduct dollar-denominated transactions and procure U.S. goods,” the Treasury added.
It also called on institutions to “conduct enhanced due diligence” on transactions involving China-based refineries, particularly those in Shandong province, and other Asia-and Middle East-based entities involved in Iran’s oil supply chain to China.
