WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating a “teapot” oil refinery and its chief executive officer for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil, including from vessels linked to the Foreign Terrorist Organization, Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics (MODAFL).
“Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror,” said Secretary of the Treasury Scott Bessent. “The United States is committed to cutting off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program.”
OFAC is additionally imposing sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s “shadow fleet” of tankers supplying teapot refineries like Luqing Petrochemical.
Today’s action is being taken pursuant to Executive Order (E.O.) 13902, which targets Iran’s petroleum and petrochemical sectors, and marks the fourth round of sanctions targeting Iranian oil sales since the President issued National Security Presidential Memorandum 2 on February 4, 2025, ordering a campaign of maximum pressure on Iran.
Concurrently, the Department of State is designating one entity pursuant to E.O. 13846, for having knowingly engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran.
TARGETING FIRST TEAPOT REFINERY
Shandong Shouguang Luqing Petrochemical Co., Ltd (Luqing Petrochemical), a teapot refinery in Shandong Province, has purchased millions of barrels of Iranian oil worth approximately half a billion dollars. Luqing Petrochemical received Iranian oil transported by shadow fleet vessels, some of which have been sanctioned for their role transporting Iranian petroleum linked to the Houthis and MODAFL, including the MEHLE (IMO: 9191711) and the KOHANA (IMO: 9254082). In mid-2022, Luqing Petrochemical was identified as a buyer of Iranian oil associated with the Iranian military and Iranian military forces.
The MEHLE was identified as blocked property pursuant to counterterrorism authority E.O. 13224, as amended, on January 12, 2024 in connection with its role in transporting Iranian crude oil on behalf of Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial official Sa’id al-Jamal. The KOHANA was identified as blocked property pursuant to E.O. 13224, as amended, in connection with shipping over $100 million worth of Iranian crude oil to the PRC on behalf of MODAFL.
Luqing Petrochemical is being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. PRC national Wang Xueqing serves as the chief executive officer and legal representative of Luqing Petrochemical, and is being concurrently designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, Luqing Petrochemical.
Shadow FLEET OIL SHIPMENTS
Iranian crude oil is transported to teapot refineries via a “shadow fleet” of vessels that usually engage in deceptive shipping practices, including automatic identification system (AIS) manipulation. Today, OFAC is sanctioning eight vessels that constitute part of this fleet, including the Comoros-flagged NATALINA 7 (IMO: 9310147), Panama-flagged CATALINA 7 (IMO: 9310159), AURORA RILEY (IMO: 9181649), and VIOLA (IMO: 9254915), San Marino-flagged MONTROSE (IMO: 9281695), Barbados-flagged VOLANS (IMO: 9422988) and BRAVA LAKE (IMO: 9232876), and the currently unflagged TITAN (IMO: 9293741).
Hong Kong-based Astrid Menks Limited, Hong Kong-based Canes Venatici Limited, and Liberia-based Placencia Services Incorporation serve as the registered owners of the NATALINA 7, CATALINA 7, and MONTROSE, respectively. PRC-based Citywallship Management Co Ltd serves as the ship manager and operator of the MONTROSE.
Astrid Menks Limited, Canes Venatici Limited, Placencia Services Incorporation, and Citywallship Management Co Ltd are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. NATALINA 7, CATALINA 7, and MONTROSE are being identified pursuant to E.O. 13902 for being property in which Astrid Menks Limited, Canes Venatici Limited, and Placencia Services Incorporation have an interest, respectively.
Hong Kong-based Jetee Co., Limited is the ship manager, operator, and technical manager of the VOLANS, while Hong Kong-based Britney Ryder Limited serves as the registered owner. Seychelles-based Seapalm Shipping Limited serves as the ship manager, operator, and registered owner of the TITAN. Panama-based Sea Breeze Shipping Inc is the registered owner, ship manager, and operator of the VIOLA.
Jetee Co., Limited, Britney Ryder Limited, Seapalm Shipping Limited, and Sea Breeze Shipping Inc are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. The VOLANS, TITAN, and VIOLA are being identified pursuant to E.O. 13902 for being property in which Britney Ryder Limited, Seapalm Shipping Limited, and Sea Breeze Shipping Inc have an interest, respectively.
British Virgin Islands-based Lyrari Group Ltd is the owner of the AURORA RILEY, while Hong Kong-based Setasean Ship Management Limited serves as the ship manager. Panama-based Zenith Bridge Inc is the owner, ship manager, and operator of the BRAVA LAKE.
Lyrari Group Ltd, Setasean Ship Management Limited, and Zenith Bridge Inc are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. AURORA RILEY and BRAVA LAKE are being identified pursuant to E.O. 13902 for being property in which Lyrari Group Ltd and Zenith Bridge Inc have an interest, respectively.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC or exempt, U.S. sanctions generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.
Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons. OFAC may impose civil penalties for sanctions violations on a strict liability basis. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions. In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities with designated or otherwise blocked persons.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here and to submit a request for removal, click here.
View identifying information on the individuals and entities designated today.
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