In another step to deprive a sanctioned country of revenues from petroleum sales, the U.S. government recently sanctioned more than 30 entities and vessels located around the world for their role in brokering the sale and transportation of Iranian oil.   

On February 24^th, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), and the U.S. Department of State imposed sanctions blocking the assets of, and prohibiting transactions with, entities in China, Hong Kong, India, Malaysia, Seychelles, and the UAE for their involvement in the sale, purchase, and transportation of Iranian oil.  These entities included oil brokers, marine transportation companies, tanker operators and traders in petroleum products.  None of these entities on their face had ties with the Iranian petroleum sector.  Additionally, OFAC and the State Department sanctioned non-Iranian vessels used for transporting Iranian oil to foreign customers, including by means of ship-to-ship transfers outside of jurisdictional port limits.   OFAC noted that these sanctioned vessels were responsible for shipping tens of millions of barrels of crude oil valued in the hundreds of millions of dollars.

While these prohibitions will only apply directly to U.S. persons, international concerns over secondary penalties being imposed on foreign companies dealing with U.S.-sanctioned entities and vessels means that the impact of these sanctions designations will be felt well beyond U.S. borders.   

This recent action is a further expansion of the U.S. government’s policy of targeting globally operating opaque oil traders and shadowy vessels willing to ship and sell oil from sanctioned countries.  In January 2025, OFAC sanctioned over two dozen Hong Kong, India, Liberia, UAE, and Vietnam-based trading and shipping companies involved in the sale and transportation of Russian crude oil, including barrels priced above the $60 price cap.

The heightened focus on targeting and sanctioning of companies facilitating the trade of sanctioned-country petroleum products means that even those companies involved in the legitimate global petroleum trade need to scrutinize the parties they are dealing with, or potentially face penalties for involvement with these sanctioned companies and vessels.