The U.S. Department of the Treasury pressured Hong Kong’s banking sector to intensify scrutiny of transactions involving Iranian oil trade.

Recently, according to reports by Bloomberg and other media outlets, in April 2025, officials from the U.S. Department of the Treasury secretly met with executives from several major banks in Hong Kong, warning them about the risks associated with transactions involving Iranian oil. Details of the closed-door meeting emerged According to disclosures, on April 7, Jesse Baker, Deputy Assistant Secretary for Asia at the U.S. Department of the Treasury, led a delegation back to Hong Kong—this time focusing not on Russia-related transactions, as previously, but specifically on Iran-related dealings. Baker’s team held confidential meetings with senior executives from HSBC, Standard Chartered Bank, and Bank of China (Hong Kong). The core agenda included three directives: rigorously scrutinizing fund flows linked to Iranian oil trade; tracing ultimate controlling parties and beneficial owners behind such transactions; and monitoring suspicious activity—including non-U.S.-dollar transactions. Attendees reported that U.S. officials explicitly warned that banks failing to cooperate effectively could face secondary sanctions—i.e., being blacklisted for indirectly facilitating transactions involving sanctioned entities. One month after this meeting, on May 13, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against nine Hong Kong entities and three mainland Chinese entities, citing terrorism-related grounds—and significantly strengthening the reach and impact of secondary sanctions. Specifically, OFAC accused the sanctioned entities of providing cover for Iranian oil transactions conducted by Sepher Energy, a company with ties to the Iranian military. One likely source of evidence underpinning these allegations may be leaked internal Iranian documents disclosed by a nonprofit organization. These documents reportedly show how the sanctioned entities helped transport Iranian crude oil to independent refineries in Shandong and Zhejiang provinces in China—by forging vessel documentation, using offshore accounts, and settling payments via third-party currencies. Estimated annual value of such gray-market trade is in the tens of billions of U.S. dollars. These entities acted as buyers and sellers of the oil, utilizing multiple bank accounts in Hong Kong and mainland China—including HSBC Hong Kong accounts and NRA (Non-Resident Accounts) or commercial accounts held at state-owned and other commercial banks. Undercurrents in energy trade Industry tracking firm Kpler revealed that in 2024, China imported 75 million metric tons of Iranian crude oil through unofficial channels—accounting for 91% of Iran’s total global exports. In April 2025 alone, independent refiners in Shandong received 6.1 million metric tons of Iranian crude oil; several such refineries have already been subjected to密集 OFAC sanctions.

The U.S. Department of State imposed sanctions on three Chinese enterprises for involvement in Iranian oil transportation.

On February 6, the U.S. Department of State announced sanctions—including designation on the Specially Designated Nationals (SDN) List—against multiple entities, individuals, and vessels involved in illicit Iranian oil and related product trade. This action aims to disrupt networks operating ‘shadow fleets’ to facilitate Iran’s oil exports. I. Sanction Details The sanctions list includes: • 14 shadow-fleet tankers: vessels engaged in transporting Iranian crude oil, petroleum products, and petrochemicals to third countries; • 15 related companies: sanctioned for trading in Iranian-origin crude oil, petroleum products, or petrochemicals; • 2 associated individuals: designated as principal operators or participants in the above-listed companies. These sanctions are implemented under Executive Order 13846, which authorizes and re-imposes specific sanctions targeting Iran. II. Sanctions Against Chinese Companies Among the listed entities, three Chinese companies were targeted for their involvement in the transportation of Iranian oil and petrochemical products: 1. Qingdao Ocean Kimo Ship Management Co., Ltd. A Panama-flagged tanker named “BENLAI,” operated by this company, transported Iranian-origin crude oil at least once in 2025. QINGDAO OCEAN KIMO SHIP MANAGEMENT CO LTD, Room 2501, 117, Zijinshan Lu, Huangdao Qu, Qingdao, Shandong 266000, China; Executive Order 13846 information: BLOCKING PROPERTY AND INTERESTS IN PROPERTY. Sec. 5(a)(iv); Organization Established Date 2025; Identification Number IMO 0213341 [IRAN-EO13846]. (Note: The company was established less than one year ago and exhibits signs of ‘one address, multiple registrations’; a similarly named entity—OCEAN KIMO SHIPPING—is also registered in Hong Kong.) 2. Shanghai Qizhang Ship Management Co., Ltd.: The U.S. Department of State alleges that this company provides commercial management services for multiple vessels transporting Iranian-origin petrochemical products. Its controlled vessel—the Barbados-flagged “YONGHENG OCEAN” (IMO: 9234472)—has transported Iranian-origin petrochemical products at least five times since July 2023. SHANGHAI QIZHANG SHIP MANAGEMENT CO., LTD., No. 24, Yangxin East Road, Shanghai 200120, China; Executive Order 13846 information: BLOCKING PROPERTY AND INTERESTS IN PROPERTY.

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