US Escalates Sanctions on Iran's Key Financier China

The US aims to cut Iran's oil exports to zero to deny funding to the Islamic Revolutionary Guard Corps (IRGC) and remove it from power. The US seeks to scale up sanctions on China, Iran's chief enabler, as part of a broader effort to neuter the threat from China and its allies. The US has stated its aim to reduce Iran's oil exports to zero, but China has continued to import Iranian oil despite US sanctions. The US is now moving to scale up sanctions against China and other key supporters of Iran.

The United States has intensified its sanctions against Iran and China, aiming to curtail Iran's oil exports and deny funding to the Islamic Revolutionary Guard Corps (IRGC). The escalation comes as part of a broader strategy to neutralize the threat posed by China and its allies [2].

The US Department of State announced sanctions on July 30, 2025, targeting 20 entities, including six Indian companies and China's Zhoushan Jinrun Petroleum Transfer Co. These firms are accused of engaging in significant transactions involving Iranian petroleum and petrochemicals [1].

Among the Indian companies sanctioned are Alchemical Solutions, Global Industrial Chemicals, Jupiter Dye Chem, Ramniklal S Gosalia & Co., Persistent Petrochem, and Kanchan Polymers. Alchemical Solutions tops the list with alleged imports of Iranian petrochemicals worth over $84 million in 2024. Global Industrial Chemicals is accused of buying over $51 million in Iranian methanol and other products between July 2024 and January 2025. Jupiter Dye Chem allegedly imported over $49 million, including toluene, during the same period. Ramniklal S Gosalia & Co. is said to have purchased over $22 million in Iranian petrochemicals, including methanol and toluene. Persistent Petrochem reportedly imported around $14 million worth of methanol between October and December 2024. Kanchan Polymers is accused of sourcing over $1.3 million in Iranian polyethylene [1].

The sanctions aim to cut Iran's oil exports to zero, thereby denying funding to the IRGC, a key driver of Iran's nuclear program and regional conflicts. The US has long sought to reduce Iran's oil exports but has faced resistance from China, which remains Iran's primary oil importer [2].

The latest sanctions against China follow a series of escalations, including the targeting of firms in Hong Kong suspected of facilitating Iran's oil trade. The US has also imposed sanctions on Iraq for importing Iranian natural gas, which has historically comprised around 40% of the country's energy needs. The US aims to disrupt Iran's ability to fund its military and destabilizing activities by cutting off its financial support networks [2].

Sanctioned firms may file petitions with the US Treasury's Office of Foreign Assets Control (OFAC) for removal from the sanctions list. The US maintains that the goal of such sanctions is to influence behavior, not to punish [1].

References:
[1] https://www.cnbctv18.com/photos/market/us-sanctions-six-indian-firms-over-iran-oil-trade-details-here-19646362.htm
[2] https://oilprice.com/Energy/Energy-General/US-To-Scale-Up-Sanctions-On-Irans-Key-Financier-China.html