US Imposes Sanctions on China-Based Oil Refinery and Shipping Companies Over Iranian Oil
The Trump administration has announced that it is imposing economic sanctions on a major China-based oil refinery and roughly 40 shipping companies and tankers involved in transporting Iranian oil. This move makes good on President Trump’s threat to impose secondary sanctions on companies and countries that do business with Iran.
The sanctions, which cut off the companies from the US financial system and penalize anyone who does business with them, come just a few weeks before President Trump and China‘s Xi Jinping are due to meet in China. Included in Friday’s sanctions is Hengli Petrochemical’s facility in the port city of Dalian, which has a processing capacity of roughly 400,000 barrels of crude oil per day, making it one of the biggest independent refineries in China.
Treasury Department Accuses Chinese Refinery of Supporting Iranian Military
The Treasury Department says that Hengli has received Iranian crude oil shipments since 2023 and has generated hundreds of millions of dollars in revenue for the Iranian military. The advocacy group United Against Nuclear Iran said in February 2025 that Hengli is one of dozens of Chinese purchasers of Iranian oil.
China is the biggest buyer of Iranian oil, importing 80% to 90% of Iranian oil before the US-Israeli war with Iran broke out, though the crude — transported by a shadow fleet of vessels — often has its origin obscured but arrives in China as oil from countries such as Malaysia. Smaller refineries, known as teapot refineries, typically are the buyers of Iranian oil.
Treasury Secretary Warns of Consequences for Countries Supporting Iranian Oil
Treasury Secretary Scott Bessent said Friday that his agency “will continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets.” Earlier this month, Bessent’s department sent a letter to financial institutions in China, Hong Kong, the UAE and Oman threatening to levy secondary sanctions for doing business with Iran and accusing those countries of allowing Iranian illicit activities to flow through their financial institutions.
Bessent said during a White House press briefing on April 15 that the administration has 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, which is a very stern measure.”
Global Energy Trade in Turmoil as War Chokes Off Oil and Natural Gas Shipments
The sanctions come as the global energy trade is in turmoil as war around the Persian Gulf chokes off oil and natural gas shipments, causing prices to soar. Treasury has tried to quell the impact of rising oil prices issuing temporary sanctions waivers on Russia oil and a one-time waiver on Iranian oil already at sea.
The AP was making efforts to contact Chinese officials for comment on the sanctions. China has disagreed with previous US sanctions, but its major companies and banks still comply with US sanctions because they are more exposed to the US-dominated financial system.
Original Article: Trump just sanctioned a major Chinese oil refinery over Iranian oil—weeks before he meets Xi Jinping | Fortune — Fortune