US Slaps Sanctions on Iranian Exchanges and China Terminal Over Oil Purchases

US Sanctions Iranian Currency Exchanges and Chinese Oil Terminal

The Trump administration has taken further action to pressure Iran into ending the war and reopening the Strait of Hormuz, a vital shipping route in the Middle East. On Friday, the US Treasury Department announced sanctions on three Iranian currency exchanges and a Chinese oil terminal, as part of a broader effort to disrupt Iran's ability to generate and repatriate funds.

The sanctions target firms that help launder billions of dollars in foreign currencies, including converting oil sales made primarily with Chinese yuan into other legal tender. The Treasury Department also unveiled sanctions on Qingdao Haiye Oil Terminal Co., a China-based firm accused of trading Iranian oil and using deceptive shipping practices to import tens of millions of barrels of sanctioned Iranian crude.

China is the biggest buyer of Iranian oil, and the sanctions on Qingdao Haiye highlight the US effort to extend pressure on those that purchase Iranian oil. The US naval blockade in the Strait of Hormuz has curbed Tehran's ability to export crude, cutting the major OPEC producer from a major source of revenue. As a result, Iran is rapidly running out of storage capacity, raising the risk of accelerated production cuts, according to Kpler.

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The US Treasury has issued a regular cadence of sanctions, including some targeted at Chinese entities, as part of the effort to pressure Iran into a deal. On Tuesday, the US Treasury warned banks they were at risk of secondary sanctions if they supported independent Chinese refiners that purchase Iranian oil. Last week, the Treasury announced sanctions on one of China's largest private refiners over ties to Tehran.

The US is ramping up economic pressure on Iran in an effort to push the country to capitulate to US demands. The closure of the Strait of Hormuz has sharply raised global energy prices, and the US is seeking to disrupt Iran's ability to generate and repatriate funds.