"US is imposing sanctions on Chinese entity Zhuhai Zghenrong and its chief executive Youmin Li. They violated US law by accepting crude oil," said Pompeo.
The US sanctions came when tensions are high between Iran and the West. The sanctions also hold significance as it might upset China which is at the loggerhead with the US on the various trade issues.
Ties between the US and Iran soured after Washington pulled out from the Iran nuclear deal last year. Since then, Washington slapped a multitude of sanctions on Tehran, citing the latter's support to state-sponsored terrorism and conflicts.
Washington in May announced that no fresh sanction waivers will be issued for Iranian oil imports to eight countries, including India.
India and China are currently the largest importers of Iranian oil. Three of the eight countries who received the waivers -- including Greece, Italy, and Taiwan -- have already reduced their Iranian oil imports to zero.