U.S. Sanctions Network of Companies Moving and Selling Iranian Oil

Continuing its strategy to pressure Iran, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the latest round of sanctions. The newest targets are a network of nearly two dozen companies, which the U.S. contents are mostly fronts or in support of Iran’s Ministry of Defense and Armed Forces Logistics to provide funds through the transport and sale of oil products to China. 

U.S. officials outlined an elaborate effort linked to Sepehr Energy, which they reported is the main commercial affiliate of Iran’s Armed Forces General Staff.  Sepehr, the U.S. reports, often carries out its oil shipments through a series of “deals” between multiple front companies that it owns or controls, creating the illusion of non-sanctionable trade between separate entities. Many of the entities involved in Sepehr Energy’s oil shipments are part of an elaborate system of oil smuggling and money laundering, directly controlled by or acting on behalf of Sepehr Energy.

“Today’s action underscores our continued focus on intensifying pressure on every aspect of Iran’s oil trade, which the regime uses to fund its dangerous and destabilizing activities,” said Secretary of the Treasury Scott Bessent.  He highlights that since Trump’s maximum pressure campaign on Iran was launched, the U.S. has taken 19 actions, sanctioning 253 individuals, entities, and vessels related to Tehran and its proxies. 

Included in today’s actions were a series of front companies based in Hong Kong that the U.S. says broker and receive the shipments of Iranian oil facilitating the transfer to the so-called “teapot” independent refineries in China. Separately, the U.S. has sanctioned three of those refineries as well as terminal operators. Between 2023 and 2024, the U.S. says the Hong Kong companies (Xin Rui Ji Trad Co., Star Energy International, and Milen Trading Co.) leased shore storage tanks holding the Iranian oil till it could be delivered to the refineries. 

Before Sepehr Energy’s oil shipments reach China, the U.S. reports that the Iranian-origin oil is first obfuscated, typically through numerous ship-to-ship transfers, oil blending, and document falsification.  Sepehr Energy, they report, has consistently relied on CCIC Singapore to accomplish not only the necessary pre-delivery cargo inspections required before oil is transferred to China, but also to conceal the oil’s Iranian origins. CICC also has a sister company Huangdao Inspection, both of which have provided inspections to numerous sanctioned tankers transporting Iranian oil.

The U.S. also cites local agencies that handle tasks such as vessel berthing and organizing discharge operations. 

It is also linking Sepehr and Iran’s Armed Forces General Staff to two tankers, the Cameroon-flagged Balu (305,704 dwt) and the Panama-flagged Roc (70,616 dwt). The registered owners of the tankers are in the Seychelles and Hong Kong. The U.S. sanctioned the tankers along with the shipping companies and commercial operators. 

All of this comes as the U.S. and Iran completed a fourth round of negotiations mediated by Oman and as Donald Trump is visiting the Middle East on his first international trip since returning to the White House.  The U.S. and Iran have agreed to continue the talks with the Omanis to set the date for the next round.