"We have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions," US Treasury Secretary Scott Bessent told reporters at the White House on Wednesday.
The US maritime blockade on Iran began on Monday as the Iran war entered its seventh week. China previously bought more than 80 per cent of Iran's shipped oil.
"We believe (that with) this blockade ... there will be a pause of Chinese buying," Bessent said.
The US Treasury has also written to two Chinese banks and "told them that if we can prove that there is Iranian money flowing through your accounts, then we are willing to put on secondary sanctions," he added.
China's embassy in the United States did not immediately respond to a request for comment on Bessent's remarks.
The Trump administration has long said it is applying "maximum pressure" on Iran over its nuclear program and support for militants across the Middle East, though sanctioned oil has continued to reach China.
The US Treasury Department also targeted Iran's oil transportation infrastructure, imposing sanctions on more than two dozen individuals, companies and vessels on Wednesday.
The move comes weeks after Washington issued a 30-day waiver of sanctions on Iranian oil at sea, which Bessent said in March allowed some 140 million barrels to reach global markets in a bid to relieve pressure on global energy supplies sparked by the war.
Bessent confirmed on Wednesday that the waiver, issued on March 20 and set to expire April 19, would not be renewed, a move Reuters reported on Tuesday.
The US has also not renewed the waiver on Russian oil at sea which expired on Saturday.
Reuters has also reported the US Treasury sent letters to China, Hong Kong, the UAE and Oman, identifying banks that have allowed Iranian illicit activity and warning they face punitive US measures.
The US financial move against Iran comes as President Donald Trump says the war could end soon, telling the world to watch out for an "amazing two days", while US forces imposing a blockade are turning back vessels leaving Iranian ports.
With the prospect of US and Iranian officials returning to Pakistan for more talks, Vice-President JD Vance, who led the US delegation at negotiations that ended on Sunday without a breakthrough, said he felt positive about where things stood.
"I think you're going to be watching an amazing two days ahead," Trump told ABC News reporter Jonathan Karl, according to a post by the reporter on X, adding he did not think it would be necessary to extend a two-week ceasefire that expires next week.
"I think it can be over very soon. It will end soon," Trump said in a separate interview on the Fox Business Network.
The talks last weekend broke down without an agreement to end the war, which Trump launched alongside Israel on February 28, triggering Iranian attacks on Iran's Gulf neighbours and re-igniting a parallel conflict between Israel and Iran-backed Hezbollah in Lebanon.
Complicating peace efforts, Israel continues to attack Lebanon as it targets Hezbollah, an Iran-backed militant group.
Israel and the US say that campaign is not covered by the ceasefire, while Iran insists it is.
Israeli and Lebanese officials held rare talks in Washington on Tuesday.
The war has prompted Iran to effectively shut the Strait of Hormuz - a vital artery for global crude and gas shipments - to ships other than its own, sharply reducing exports from the Gulf, particularly to Asia and Europe, and leaving energy importers scrambling for alternative supplies.
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