Small Chinese non-state refineries—known as “teapots”—appear to be holding off on new orders of Iranian crude following Washington’s recent sanctions on Shouguang Luqing Petrochemicals, a refinery based in Shandong.
According to market intelligence cited by maritime data firm Kpler, no fresh deals for Iranian crude have been reported since March 20.
Iran’s main oil customers are small Chinese refineries, officially not linked to state structures, most of which are based in Shandong, where 90% of Iranian oil cargoes is discharged.
Refiners are assessing the risks associated with continuing to purchase Iranian crude and are closely monitoring the repercussions faced by the sanctioned Shouguang Luqing Petrochemicals, which has a refining capacity of 60,000 barrels per day.
While there are currently no indications that banks have cut off financing for Luqing, the refinery's ability to secure financing and maintain operations could influence the decisions of other teapots, particularly those heavily reliant on Iranian crude as their primary feedstock, according to Kpler.
Despite the cautious approach to new orders, China's imports of Iranian crude are still projected to show a significant month-on-month increase in March.
As of March 26, Iranian cargoes transported by vessels not listed under US Office of Foreign Assets Control (OFAC) sanctions appeared to have discharged successfully in Chinese ports, suggesting that ports have not yet turned away Iranian crude despite the tighter US sanctions.
Iran’s oil sales to China dropped sharply in January. Data from Kpler shows that Iran’s oil deliveries to China fell below 850,000 barrels per day in the period, compared to over 1.8 million barrels per day in October last year.
However, the recent US move to sanction Huizhou Huaying, an oil terminal in southern China, may prompt some ports to re-evaluate the risks of accepting sanctioned vessels in the future.
Data indicates that two Aframax tankers blacklisted by OFAC earlier this year managed to discharge Iranian crude at the ports of Yangshan and Dongying this week.
The US sanctions on the Chinese refinery come as part of Washington's efforts to maximize economic pressure on Iran to disrupt its access to financial resources. Iran's oil sales are a key target of these sanctions.
In June of last year, Soroush celebrated Canada's decision to list the Islamic Revolutionary Guard Corps (IRGC) as a terrorist entity.
Little did he know, however, that his activism to ostracize the group that had dragooned him into service would upend his own life.
Soroush is part of a community of Iranians living in Canada who bitterly resent their country's rulers for impressing them into the Islamic Republic's security forces.
Along with the regular military and police, the IRGC is another agency that Iranian men could be forced to join to complete their mandatory military service.
A transnational paramilitary force, the Revolutionary Guards spearhead Tehran's influence in the Middle East, including training and arming of affiliates like Hamas, Hezbollah, the Houthis and Iraqi militias.
Now their lives on Canadian soil are in jeopardy and are left to the discretion of immigration officers who may deem them inadmissible under the new policy.
Iran International spoke to Soroush and two other Iranian nationals whose permanent residency applications are also in limbo and who do not wish to be identified due to security concerns. Iran International has also reviewed evidence demonstrating the men were conscripts and not permanent IRGC servicemen.
From advocate to victim
Soroush Salehi washed dishes and carried out other menial tasks and errands as an IRGC conscript fulfilling his mandatory service more than 18 years ago in Iran.
The mechanical engineer moved to Calgary, Alberta in search of a peaceful life, leaving his theocratic homeland where he saw no future.
He came to Canada in 2022 in the same year Iran's clerical rule saw the biggest challenge to their system in decades as the so-called Woman Life Freedom protest movement swept the country, only to be quashed with deadly force.
Soroush chose Canada after being rejected by the United States in 2020, despite his wife's American citizenship, after US immigration authorities deemed him a “member of a terrorist organization.”
After US President Donald Trump put the IRGC on the US terrorist list in 2019, no exemptions were made for conscripts. Promises by President Joe Biden’s administration to look into exempting conscripts never materialized.
Now Soroush may be deemed inadmissible in Canada, too. Soroush is currently a temporary resident under a work permit and if no exemptions are provided, he might be deemed inadmissible and deported.
“I had dreams with my wife for a life here. Everything was good until September 2024,” Soroush told Iran International, “All my dreams are going to be devastated and are going to be shattered.”
Humiliation
Shahed, whose declined to use his real name citing security concerns, lives in Vancouver, British Columbia with his wife and five-year-old son who was born in Canada, who is a citizen.
From 2013 to 2015, Shahed completed his mandatory military service with the IRGC, and was tasked with administrative work, never training in military activities. The experience was deeply degrading, he said.
“The only purpose is just humiliating you, sitting there and cleaning the desk.”
In Canada with a work permit as an on-site engineer, Shahed's permanent residence application has been under review for more than three years.
Shahed had officially declared his mandatory military service and provided an ID card indicating the end of his mandatory service in a sworn affidavit reviewed by Iran International.
But he received and official letter saying immigration officers had “concerns surround your membership to the IRGC.”
“Based on your previous membership to the IRGC, I have reasonable grounds to believe you may be inadmissible to Canada ... (based on) membership in an organization that has engaged in subversion or terrorism,” the letter said. Shahed has responded protesting his innocence but has yet to hear back from authorities.
“Every day I have to deal with the stress when I wake up and be prepared that today I could be inadmissible and would have to leave Canada,” Shahed said. “I am not safe anymore.”
Shahed took part in Canadian protests in support of the 2022 unrest in Iran and fears for his safety if deported back to Iran.
Divorce - a way out?
Iran International spoke to another conscript and his wife over Zoom. They too did not want to be identified for their protection and for the safety of their family in Iran.
Since the designation, their lives are mired in uncertainty.
“This decision by the government is affecting every aspect of our lives,” said Farid's wife Roya. “We feel like prisoners here.”
They are both on an open work permit and applied for permanent residency in 2024, but since the IRGC designation their application has been stuck in security checks.
The married couple said they have decided not to leave Canada to travel or visit family because they fear being barred reentry.
Major life decisions like starting a family and buying a house have all been put on hold. If Farid is deported, they said they will likely get a divorce so his wife can have a life in Canada.
Farid told Iran International he served his mandatory service more than 10 years ago and never took part in military drills but worked in a clerical role at an Iranian bank.
Random process
The process in Iran for selecting conscripts to the various branches - whether for the regular army, the IRGC or law enforcement - is random.
Islamic Republic officials tasked with picking conscripts and officers often select recruits by pointing out young men arrayed in a line in front of them.
Prior to listing the IRGC a terror entity, Canada’s former Prime Minister Justin Trudeau had resisted calls to make the designation because of the plight of conscripts.
Activists continued to lobby for the change, arguing that identifying those low-level conscripts was an easy and verifiable task.
The terrorist designation empowers the justice system to prosecute IRGC members who have obtained Canadian citizenship and hold them criminally liable for crimes committed overseas.
On the fourth anniversary of the IRGC's downing of a civilian airliner which killed scores of Canadian citizens and residents, Trudeau said in Jan. 2024 that Canada was looking at a way to punish the group.
“We know there is more to do to hold the regime to account and we will continue our work, including continuing to look for ways to responsibly list the IRGC as a terrorist organization.”
When the official announcement was made, Justice Minister Arif Virani said an individual’s willingness and intent to support the IRGC would be an important consideration under the Criminal Code.
Immigration, Refugees and Citizenship Canada told Iran International that applications are considered on a case-by-case-basis.
“Conscription, in itself, does not necessarily result in a person being deemed inadmissible to Canada," it said. "The admissibility of individuals will be assessed based on a number of considerations."
Those range from the nature of their role in the IRGC to their level of engagement with the organization, it added.
Sadeq Bigdeli, a Toronto-based lawyer who represents several conscripts, said probably only under ten former conscripts have been deemed inadmissible by courts.
Bigdeli said he submitted a petition for guidelines excepting conscripts and even provided a draft text.
“It's not only unfair, but also basically helping the Islamic Republic by diverting resources from where they should be: the real terrorists."
While IRGC conscripts have declared their service voluntarily, actual IRGC members - whom Bigdeli called "masters of deception" – are likely walking free in Canada.
