Summary: U.S. Treasury Secretary Scott Bessent told Fox Business that China has cut its crude oil purchases by about 40% in recent months, a change he said is materially reducing oil revenue flowing to Iran. He pointed to U.S. sanctions on privately owned Chinese teapot refineries as a key factor in the drop in Iranian crude purchases, and noted that China’s overall buying has also fallen because of prevailing prices and the size of its strategic petroleum reserve.
Bessent described the enforcement action against Chinese teapot refineries - privately run processing facilities - as prompting a marked fall in their purchases of Iranian oil. He said the combined effect of the sanctions and broader market dynamics is placing direct pressure on the Iranian government by reducing its oil receipts.
In discussing the drivers behind the decline in Chinese crude demand, the Treasury Secretary identified two factors explicitly: the current level of oil prices and China’s large strategic petroleum reserve. According to his comments, those elements have contributed to a drop in overall Chinese crude purchases that supplements the reduction caused by targeted sanctions on specific refineries.
On a separate topic, Bessent raised concerns about Chinese artificial intelligence models. He accused some of incorporating identifying features from U.S. large language models and described the practice as unacceptable. In his words: "We are finding watermarks of our U.S. large language models on many of the Chinese models, and that's unacceptable." He added that the administration planned to examine the situation further "in the coming days or week."
The statements link targeted sanctions and broader market conditions to a meaningful decline in one major buyer’s crude intake, and they flag a parallel technology concern that the administration intends to probe. The comments do not, however, provide additional quantitative details beyond the approximately 40% reduction figure or specific timelines for any follow-up actions beyond the short window mentioned for the AI inquiry.
Contextual notes: The Treasury Secretary connected sanctions on private Chinese refineries and China’s own market factors to the recent fall in crude purchases from Iran. He asserted the decline is significantly affecting Iran’s oil revenues and said U.S. officials will pursue scrutiny of alleged watermarking in Chinese AI models shortly.