The US Treasury Department imposed sanctions on five Chinese refineries accused of purchasing Iranian crude oil as part of a broader effort to restrict Tehran's access to international markets and constrain its regional activities. Hengli Petrochemical received sanctions on April 24, while four other refineries were targeted in earlier enforcement actions during 2025, according to available reports. The Treasury also sanctioned 40 shipping firms and vessels linked to the transactions.
The targeted refineries—Hengli Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shougang Luqing Petrochemical, and Shandong Shengxing Chemical—are among China's independent oil processors, colloquially referred to as "teapots" in the industry. These facilities handle the majority of Iranian crude imports into China. Hengli, identified as the second-largest such refinery in the country, has received Iranian oil shipments from sanctioned shadow fleet vessels dating back to at least 2023, according to Treasury assessments.
The Chinese government rejected the sanctions as illegitimate. The Ministry of Foreign Affairs argued that the measures "violate international law and the basic norms of international relations." Chinese authorities also stated that their country would not recognize, implement, or comply with the sanctions targeting the five companies.
Treasury Secretary Scott Bessent framed the enforcement action as a mechanism to limit Iran's economic capacity and regional influence. He stated that the sanctions aim to hamper Tehran's aggression in the Middle East while curtailing its nuclear ambitions. The Treasury cited Iran's pursuit of nuclear capabilities and its destabilizing activities in the region as justification for the escalated financial pressure on entities facilitating Iranian oil sales.
