On April 16, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued an Advisory for Shipping and Maritime Stakeholders on Detecting and Mitigating Iranian Oil Sanctions Evasion (the Advisory). The Advisory updates guidance from September 2019 and is part of the implementation of President Trump's February 4, 2025, National Security Presidential Memorandum (NSPM-2), which aims to impose "maximum pressure" on Iran. In addition to the Advisory, OFAC announced its sixth round of sanctions targeting Iranian petroleum sales since the Trump administration took office in January 2025. The recent designations include seven entities and five vessels allegedly associated with the Iranian petroleum and petrochemical sectors. 

Here are our key takeaways from the Advisory and accompanying designations. 

1. The Iranian Petroleum Sector is a Clear Enforcement Priority. The Advisory includes a discussion of red flags and risk mitigation strategies that overlaps with information shared by OFAC in past guidance (see, e.g., here and here). Notably, however, this marks the sixth round of sanctions targeting the Iranian petroleum sector since the Trump administration took office (see also April 10 announcement, March 20 announcement, March 13 announcement, February 24 announcement, and February 2 announcement). With this announcement, the administration continues to make clear that rigorous sanctions enforcement in connection with Iran's petroleum and petrochemical sectors is a top enforcement priority. 
2. Heightened Focus on Chinese Importers. Among the parties designated is a teapot refinery in China, which was added for its alleged role in purchasing more than a billion dollars' worth of Iranian crude oil. In an accompanying press release titled, "Treasury Increases Pressure on Chinese Importers of Iranian Oil," Secretary of the Treasury Scott Bessent noted, "[a]ny refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran's oil trade places itself at serious risk." He added, "[t]he United States is committed to disrupting all actors providing support to Iran's oil supply chain, which the regime uses to support its terrorist proxies and partners." The focus on Chinese participants allegedly operating in the Iranian petroleum sector is consistent with the administration's NSPM-2 Memo, which instructs the Secretary of State to "implement a robust and continual campaign, in coordination with the Secretary of the Treasury and other relevant executive departments or agencies [] to drive Iran's export of oil to zero, including exports of Iranian crude to the People's Republic of China" (emphasis added). 
3. Red Flags for Maritime Stakeholders. Much of the Advisory focuses on "deceptive international trade practices" used by the Iranian government and their proxies to evade U.S. sanctions. The red flags discussed include: 
   • The use of complex and often less efficient trade routes, including multiple ship-to-ship transfers to obscure cargo origin
   • The use of shadow payment channels to obscure financial routes used to process associated transactions, including the use of intermediaries in jurisdictions with less stringent financial regulations
   • The use of a "shadow fleet," which generally includes older vessels that do not meet standard maritime regulations and that rely on flag registries with lower operating and due diligence standards
   • The use of ships with opaque ownership structures to conceal connections to Iran
   • Missing or manipulated vessel data, including Automatic Identification System (AIS) data to disguise vessel movements
   • The sale of petroleum products at discounted rates to attract buyers despite sanctions risk 
4. Iran-Focused Sanctions Risk Mitigation Strategies. The Advisory provides detailed guidance on various strategies that maritime industry participants may consider adopting with an eye towards mitigating sanctions risks associated with Iranian petroleum shipments. Such strategies include: 
   • Enhanced due diligence including a detailed review of vessel ownership and flag registration history, cargo origin, insurance verification, other shipping documentation, as well as other counterparty know-your-customer (KYC) processes
   • Vessel monitoring and investigation of vessels with unusual routes or manipulated AIS data
   • Adoption of contractual safeguards, including warranties that parties are not engaging in activity that would violate, or cause a U.S. person to violate, U.S. sanctions laws and regulations or other applicable laws, exclusion clauses that allow parties to exit or terminate an agreement without violating U.S. sanctions prohibitions, and the right to terminate an agreement for "deceptive practices"
   • Refusal of service or port entry to sanctioned vessels by port agents, operators, and terminals
   • Collaboration with regulatory authorities and industry association benchmarking to stay abreast of recent sanctions developments and emerging risks 
5. Reminder of U.S. Legal Exposure for U.S. and Non-U.S. Persons. The Advisory highlights that in addition to general prohibitions of U.S. persons from engaging in transactions with blocked persons and transactions involving Iranian-origin petroleum and related products, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions and engaging in conduct that evades U.S. sanctions. The Advisory notes several instances in which OFAC took enforcement action against non-U.S. persons for conduct involving shipping practices in connection with the Iranian petroleum sector. 

For more information, please contact:

Timothy P. O'Toole, totoole@milchev.com, 202-626-5552

Leah Moushey, lmoushey@milchev.com, 202-626-5896

Melissa Burgess, mburgess@milchev.com, 202-626-5914 

Collmann Griffin, cgriffin@milchev.com, 202-626-5836

Caroline J. Watson, cwatson@milchev.com, 202-626-6083

Annie Cho, acho@milchev.com, 202-626-1570

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