Oil terminal in Qingdao, China [AFP Yonhap News]

The U.S. Department of State and the Treasury Department announced on the 1st (local time) through press releases that they will impose sanctions on Chinese companies and individuals identified as conduits for importing Iranian oil products.

The sanctioned entities include the Qingdao Haiye Petroleum Terminal in Shandong Province, China, its representative Li Xinchen, and shipping companies operating 'shadow fleet' vessels that transport Iranian oil products from Hong Kong and third countries.

The State Department pointed out that Haiye imported tens of millions of barrels of Iranian oil and petroleum products on dozens of occasions last year, resulting in billions of dollars flowing into Iran.

The State Department determined that the company imported Iranian oil and petroleum products through ship-to-ship (STS) transfers off the coast of Singapore.

The State Department also sanctioned vessels and vessel management companies registered in the UK, Panama, and Hong Kong involved in the transportation of Iranian oil products.

The assets of the sanctioned companies and individuals within the United States will be frozen. This also applies to entities in which they directly or indirectly own 50% or more stake. Sanctions will also be imposed on institutions that conduct transactions of funds, goods, or services with them.

Separately, the Treasury Department designated three Iranian currency exchange houses that facilitate billions of dollars in foreign exchange transactions annually, along with their front companies, as targets for sanctions, effectively blocking their transactions with other financial institutions.

The Treasury Department stated that these companies played a role in bringing in yuan from the sale of oil and petroleum products from China and converting it into other currencies that could be used for the military funding of Iran and its proxy forces.

The purpose of these sanctions is to cut off Iran's oil exports, thereby restricting its war funding, and simultaneously impact China's energy supply and demand, as China imports about 90% of Iran's oil.

The U.S. Department of State and Treasury Department previously announced on the 24th of last month that they would impose sanctions on Hengli Group, a major Chinese refining company that imports oil from Iran.

Hengli has a crude oil processing capacity of approximately 400,000 barrels per day through its refining facilities in Dalian, a port city in northeastern China, making it the largest among China's independent refiners, often referred to as 'teapot' refiners.

The Treasury Department also froze approximately $344 million (about 500 billion Korean won) worth of virtual currency believed to be linked to Iran.

The Treasury Department has launched an 'economic rage' operation to exert economic pressure on Iran, hinting at the possibility of 'secondary boycotts' against two Chinese banks suspected of receiving Iranian funds.

The U.S. sanctions targeting both China and Iran are seen as a move to pressure China ahead of the U.S.-China summit scheduled to be held in Beijing around November 14-15 between President Donald Trump and President Xi Jinping.

President Trump appears to be seeking China's involvement in facilitating negotiations to end the stalemate with Iran. These sanctions can also be viewed as 'negotiating chips' to be used in the summit.