Treasury Secretary Scott Bessent announced new sanctions Tuesday targeting Iran’s shadow banking network and Chinese entities purchasing Iranian oil, escalating U.S. efforts to cripple Tehran’s economy. The measures, part of Operation Economic Fury, aim to disrupt Iran’s ability to fund military operations and suppress violence in the Middle East. Treasury officials warned financial institutions to avoid transactions with 35 sanctioned entities, including private shell companies facilitating illicit oil sales and weapons procurement. “This network enables Iran’s armed forces to sustain destabilizing activities,” Bessent stated, emphasizing the regime’s threat to global trade and U.S. interests.**

Iran’s shadow banking system, a web of international shell firms, has long bypassed Western sanctions to monetize oil exports. The Treasury identified Hengli Petrochemical Refinery, a Chinese independent refiner, as a key player in Iran’s oil trade, accounting for a significant share of Beijing’s purchases. U.S. and global banks face penalties if they process transactions involving teapot refineries—independent Chinese entities that dominate Iran’s oil imports. The sanctions follow a reversal of last month’s easing, which aimed to stabilize oil markets but was abandoned amid renewed tensions.**

The Treasury’s alert urged financial institutions to scrutinize ties to teapot refineries, which handle over 90% of China’s Iranian oil imports. Hengli, one of Iran’s largest crude buyers, was specifically sanctioned, underscoring the U.S. focus on cutting Tehran’s revenue streams. Analysts note the move signals Washington’s resolve to isolate Iran despite prior diplomatic overtures. Financial institutions risk secondary sanctions for noncompliance, intensifying pressure on global markets to police illicit flows.**

This escalation reflects a strategic shift after months of fluctuating U.S. policy. By targeting both Iran’s financial infrastructure and its largest oil buyers, the administration seeks to choke off funding for proxy groups and regional destabilization. The long-term goal remains compelling Iran to negotiate a peace deal, though the effectiveness of these measures hinges on global enforcement cooperation. The Treasury’s actions highlight the fragility of Iran’s economy under sustained pressure.