BAKU, Azerbaijan, March 29. According to an outlook from Rystad Energy, the latest round of U.S. sanctions on Iran targets a Chinese-owned "teapot" oil refinery, marking a significant escalation in efforts to tighten economic pressure on Tehran, Trend reports.
The Shouguang Luqing refinery, which processes up to 60,000 barrels per day (bpd) of Iranian crude, is now in the crosshairs of U.S. measures. If these sanctions expand to other similarly independent refineries, the effects could be felt globally, potentially reshaping geopolitics and impacting energy markets.
Although the situation has not yet reached a "maximum pressure" stage—where Iranian oil exports could drop from 1.5 million bpd to near zero—the U.S. is intensifying its efforts to bring Tehran back to the negotiation table for a new nuclear deal. However, the growing pressure risks driving oil prices higher, which would be counterproductive to President Donald Trump’s stated goal of lowering energy costs to combat inflation.
Rystad Energy’s data highlights that nearly all Iranian crude exports are directed to China, so effective pressure on Iran would require Beijing's cooperation. The targeting of a Chinese refinery may indicate that the U.S. is trying to leverage China, the largest importer of Iranian oil, to reduce or stop its purchases altogether. This is the fourth round of sanctions, and each round brings increased economic pressure on Tehran. Just days before this move, the U.S. revoked a sanction waiver that allowed Iraq to import electricity from Iran, further tightening the noose around the Iranian economy.
Jorge León, Head of Geopolitical Analysis at Rystad Energy, emphasized that this growing pressure could have widespread ramifications, not only for Iran but for global energy markets and geopolitics as well.