US sanctions Iranian military front companies selling oil to China

The United States on Tuesday introduced fresh sanctions against a shipping network it says has sent millions of barrels of Iranian oil to China, a day after Iran International reported on its activities citing confidential business documents.

The network facilitated "the shipment of millions of barrels of Iranian crude oil worth billions of dollars to China on behalf of Iran’s Armed Forces General Staff (AFGS) and its front company, Sepehr Energy Jahan Nama Pars (Sepehr Energy)," a statement by the State Department said.

Iran International reported that Sepehr Energy company worked on behalf of the Iranian military and spawned a network of shell companies to sell sanctioned Iranian oil to Asia and did business with a Netherlands-based firm that was aware of its government ties.

Business documents and emails obtained by Iran International revealed a layered network of shell companies used to mask the military links and channel the sanctioned oil through foreign intermediaries.

In a separate statement on Tuesday, the US Treasury Department said "nearly two dozen firms operating in multiple jurisdictions in virtually every aspect of Iran’s illicit international oil trade" were targeted in the latest designations.

One of the entities sanctioned by the US Treasury on Tuesday was Xin Rui Ji, a company cited in Iran International's reporting.

"The Iranian government allocates billions of dollars’ worth of oil annually to its armed forces to supplement their budget allocations, underwriting the development of ballistic missiles and unmanned aerial vehicles, as well as financing regional terrorist groups," the Treasury said.

The State Department also said that "the revenue from the sale of this oil funds the development of ballistic missiles and UAVs, nuclear proliferation, and Iran’s terrorist proxies, including the Houthis’ attacks on Red Sea Shipping, the US Navy, and Israel."

“Today’s action underscores our continued focus on intensifying pressure on every aspect of Iran’s oil trade, which the regime uses to fund its dangerous and destabilizing activities,” said Secretary of the Treasury Scott Bessent.

“The United States will continue targeting this primary source of revenue, so long as the regime continues its support for terrorism and proliferation of deadly weapons.”