“Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror,” Treasury Secretary Scott Bessent said.

“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.”

The State Department concurrently sanctioned the Huaying Huizhou Daya Bay Petrochemical Terminal Storage oil terminal in China for buying and storing Iranian crude oil from a sanctioned vessel.

The Department of State says “teapot” refineries are private Chinese refineries that are the primary purchasers of Iranian crude oil. Thursday’s sanction is the first against a teapot refinery.

A “shadow fleet” of oil tankers transports the Iranian crude oil to the refineries and storage facilities, often by transferring the oil to other vessels in international waters while using deceptive automatic identification system signals to conceal their locations and activities.

The Iranian shadow fleet includes vessels linked to the Houthis in Yemen and Iran’s Ministry of defense of Armed Forces Logistics,according to the State Department.

The Houthis are a designated foreign terrorist organization that attacks commercial shipping in the Red Sea and Gulf of Aden.

The State Department and Treasury Department also sanctioned a dozen entities and eight vessels identified as part of the shadow fleet.

The vessels are flagged by many nations and owned and operated by entities in Hong Kong, China, Panama, Liberia and the British Virgin Islands.

The sanctions mean all property and interests in property of the sanctioned people and entities that are located in the United States or in the possession or control of U.S. citizens are blocked and must be reported to the Treasury Department’s Office of Foreign Assets Control.

Violations of the sanctions are punishable by civil or criminal penalties on U.S. citizens and those of foreign countries.