US hits China-linked Iran oil trade with sanctions ahead of Trump trip

WASHINGTON — Ahead of President Donald Trump’s high-stakes summit in China, the Treasury Department on Monday announced new sanctions targeting Chinese purchases of Iranian oil. 

The move came as Trump called Iran’s latest proposal to end the war “garbage” and cast doubt on the tenuous ceasefire reached between the two countries on April 8. According to Iranian state media, the proposal called for the United States to pay “war reparations,” lift all sanctions and recognize Tehran’s sovereignty over the Strait of Hormuz. 

To increase pressure on Iran, the Trump administration has issued a blitz of new sanctions as part of its Operation Economic Fury campaign. The latest measures target 12 individuals and entities in Iran, Hong Kong, the United Arab Emirates and Oman, focusing on the Islamic Revolutionary Guard Corps’ use of front companies to disguise oil sales to China. Those designated in Monday’s action include three senior officials of the IRGC's Shahid Purja'fari Oil Headquarters: Ahmad Mohammadi Zadeh, Samad Fathi Salami and Mohammadreza Ashrafi Ghehi. 

China is the biggest buyer of Iranian oil, accounting for roughly 80% to 90% of Tehran’s oil exports before the war, much of it moved by a shadow fleet of vessels to evade sanctions.

In recent weeks, Treasury has imposed sanctions against five independently run Chinese “teapot” refineries, including the Hengli Petrochemical Refinery that is believed to be generating hundreds of millions in revenue for Iran. China’s Ministry of Commerce has ordered its companies not to comply with the US sanctions.

Treasury Secretary Scott Bessent said in a statement that US sanctions would continue to target Iran’s use of oil revenue for weapons production, support for terrorist proxies and the repression of the Iranian people.  

“As Iran’s military desperately tries to regroup, Economic Fury will continue to deprive the regime of funding," Bessent said. “Treasury will continue to cut the Iranian regime off from the financial networks it uses to carry out terrorist acts and to destabilize the global economy.” 

Briefing reporters on Sunday, US officials said Trump will use his meeting with Chinese leader Xi Jinping to press Beijing to help broker an end to the Iran war, now in its third month. Trump told Fox News on Monday he was considering resuming the US Navy’s mission to guide commercial ships through the Strait of Hormuz, which he abruptly paused last week.

This developing story has been updated.