The United States has ratcheted up pressure on Tehran, imposing sanctions on 35 entities and individuals on Tuesday over their alleged roles in Iran’s shadow banking sector. The Treasury Department also threatened sanctions against banks conducting business with Chinese “teapot” refineries if they pay tolls for shipments crossing the Strait of Hormuz. The designated individuals and firms reportedly facilitated the movement of the equivalent of tens of billions of dollars tied to sanctions evasion and what the US called Iran’s sponsorship of terrorism.
The Treasury Department’s Office of Foreign Assets Control (OFAC) separately cautioned financial institutions against dealing with any firm compensating the Iranian government or the Islamic Revolutionary Guard Corps (IRGC) for passage through the strait, citing significant sanctions risk. Independent Chinese “teapot” refineries, primarily located in Shandong province, were singled out due to their role in importing and refining Iranian oil, with some allegedly using the U.S. financial system for dollar-denominated transactions. Iran’s shadow banking system serves as a critical financial lifeline for its armed forces, enabling illicit oil sales, the purchase of sensitive components for weapons systems, and the transfer of money to its proxies. Private companies known as ‘rahbars’ manage thousands of shell companies overseas to execute payments for Iranian imports and exports, coordinating with other firms to facilitate payments for sanctioned entities.
Treasury Secretary Scott Bessent stated that illicit funds funnelled through this network support the regime’s ongoing terrorist operations. The sanctions aim to expose and disrupt the mechanisms used by Tehran to receive payments for oil and other commodities, thereby reducing its revenue. Since February 2025, OFAC has imposed sanctions on approximately 1,000 Iran-related individuals, vessels, and aircraft as part of a campaign to exert maximum economic pressure. Among the entities sanctioned were Farab Soroush Afagh Qeshm Company, Nix Energy, Tai Lung Trading, and several ‘rahbar’ companies working with Bank Sina and the military-affiliated Bank Sepah.
