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Treasury directs banks to steer clear of China’s ‘teapot’...
Eleanor Muel · 2026-04-29 · via Semafor

The Treasury Department on Tuesday will direct financial institutions to keep additional distance from transactions on behalf of Chinese “teapot” oil refineries, independent facilities that play a key role in importing and refining Iranian fuel.

Treasury’s Office of Foreign Assets Control has already imposed sanctions on five of China’s teapot refineries: Shandong Shouguang Luqing Petrochemical, Shandong Shengxing Chemical, Hebei Xinhai Chemical, Shandong Jincheng Petrochemical, and Hengli Petrochemical Refinery, per Tuesday’s guidance.

That guidance, shared first with Semafor, now urges banks and others to “conduct enhanced due diligence” when dealing with the teapots or other firms that could be helping Iran send its oil to China. It warns specifically of “front companies” that Iran has used to “broker shipments” and accept payments, as well as the country’s so-called “shadow fleet” that it says “regularly engage[s] in deceptive shipping practices.”

The guidance also suggests the financial institutions weigh communicating with Chinese banks “about sanctions risks” and “gathering additional information on relevant customers and transactions.”