Washington Slaps Sanctions on China Refinery Linked to Iranian Oil

The United States has imposed fresh sanctions on a China-based oil refinery and about 40 shipping companies and vessels accused of facilitating Iran’s oil exports, in a major escalation of its economic pressure campaign against Tehran.

The sanctions, announced by the U.S. Treasury Department, target Hengli Petrochemical’s refinery in Dalian, a so-called “teapot” refinery accused of purchasing billions of dollars’ worth of Iranian crude oil.

In addition to the refinery, roughly 40 shipping firms and tankers linked to Iran’s so-called “shadow fleet” were blacklisted. U.S. officials say these vessels use covert tactics such as ship-to-ship transfers and disguised ownership structures to move Iranian oil to global markets, particularly China.

Washington says the move is part of a broader strategy to cut off Iran’s primary source of revenue oil exports, which it claims funds the country’s military and regional activities.

U.S. authorities allege that the sanctioned refinery has been processing Iranian crude since at least 2023, contributing significant revenue streams to Tehran.

China, however, has strongly condemned the sanctions, describing them as “illegal” and accusing the U.S. of politicizing trade relations and unfairly targeting Chinese firms.

Despite repeated sanctions, China remains the largest buyer of Iranian oil, accounting for the majority of Tehran’s crude exports, often through smaller independent refineries that have limited exposure to the U.S. financial system.

The latest measures are expected to heighten tensions between Washington and Beijing, especially ahead of high-level diplomatic engagements between both countries.