The U.S. Treasury warned banks that they risk sanctions if they engage in transactions with Chinese refineries that process Iranian oil.

The U.S. Treasury issued a warning on Tuesday, urging financial institutions to avoid transactions with Chinese refineries that process Iranian oil, known as 'teapots.' These refineries purchase about 90% of Iran's oil exports, generating revenues that support the Iranian regime and its armament programs. Treasury Secretary Scott Bessent emphasized that any entity facilitating these flows risks sanctions. Recently, the U.S. sanctioned one of the largest 'teapot' refineries, Hengli Petrochemical, and four other refineries. The Treasury has expanded measures to include port terminal operators in Shandong province and logistics service providers. Iranian oil is often transported through clandestine methods, including the use of a 'phantom fleet' of tankers. The warning comes ahead of a planned visit by Trump to Beijing, amid tensions between the U.S. and Iran.