United States Imposes Sanctions on Chinese Refinery for Purchasing Iranian Oil
The administration of US President Donald Trump has imposed new sanctions on independent oil refineries in China. This action comes ahead of the continuation of peace talks between Washington and Tehran.
The US Department of the Treasury has targeted Hengli Petrochemical in Dalian. This refinery is said to be one of the largest buyers of crude oil and petroleum products from Iran.
The Office of Foreign Assets Control (OFAC) has also imposed sanctions on around 40 shipping companies and vessels. They are accused of being part of Iran’s shadow fleet for transporting oil to global markets.
The Chinese government has rejected the move. The Chinese Embassy in Washington stated that unilateral sanctions are illegitimate and damage normal trade.
“We call on the US to stop politicising trade and technology issues and using them as weapons and tools, and to stop abusing various types of sanctions to attack Chinese companies,” said the embassy spokesperson in an official statement on Saturday (25/4/2026).
The sanctions have triggered operational hurdles. The refinery struggles to obtain crude oil supplies and must sell products under different names. The industry accounts for about a quarter of China’s refining capacity. Profit margins remain thin amid weak domestic demand.
Data from analytics firm Kpler shows that China absorbed more than 80 percent of Iran’s oil exports in 2025. Trade relations between the two countries remain strong despite sanction pressures.
The effectiveness of sanctions against independent refineries is considered limited. Some experts assess that these companies are relatively protected due to minimal ties to the US financial system.
Greater pressure is expected if sanctions target financial institutions. The US government is beginning to move in that direction.
“The Treasury Department will continue to narrow the network of ships, intermediaries, and buyers that Iran relies on to move its oil to global markets,” it stated.
Bessent also revealed an approach to the banking sector. He mentioned that the government has sent letters to two banks in China regarding potential Iranian fund flows.
Market conditions are also changing. Small refineries in China are now buying Iranian oil at a premium above Brent crude prices. This situation arose after the temporary lifting of sanctions on Iranian oil at sea, which spurred expectations of demand from India.
Last week, the United States ended that relaxation. Iran’s access to global markets is once again under pressure.