Iran’s Sanction-Skirting Oil Network Draws New U.S. Fire

The U.S. State Department rolled out another round of sanctions Tuesday targeting an Iranian oil smuggling network allegedly responsible for funneling billions in crude oil sales to China on behalf of Iran’s Armed Forces General Staff.

The scheme, operated through front company Sepehr Energy Jahan Nama Pars, is accused of bankrolling Iran’s ballistic missile development, nuclear ambitions, and its web of proxy militias—from Red Sea Houthi attacks to assaults on the U.S. Navy and Israel.

“As long as Iran devotes its illicit revenues to funding attacks on the United States and our allies, supporting terrorism around the world, and pursuing other destabilizing actions, we will continue to use all the tools at our disposal to hold the regime accountable, said the Department’s press statement.

The action, taken under Executive Order 13224 and its amendments, is the latest enforcement move under National Security Presidential Memorandum 2—a Trump-era policy still guiding a maximum-pressure approach to Iran.

It comes just weeks after the Treasury designated Chinese teapot refiner Shandong Shengxing for purchasing over $1 billion in crude from an IRGC-QF-linked front.

The shadow fleet facilitating these trades—tankers switching flags, faking manifests, and vanishing from tracking systems—has drawn increasing scrutiny. But enforcement has struggled to keep pace with the sheer volume of illicit flows. Chinese imports of Iranian crude hit a record 1.8 million bpd in March, contributing to a 20-month high in overall oil inflows.

While sanctions are meant to cut off Iran’s oil revenues entirely, real-world results have been more muddled. Tehran continues exporting, albeit at steep discounts, and China appears more emboldened than deterred. Still, U.S. officials argue that starving Iran’s military-industrial complex remains non-negotiable.

Market watchers will be eyeing whether the crackdown finally crimps volumes—or just adds another layer to the world’s most lucrative game of maritime hide-and-seek.

Source: Oilprice.com