Newsletters
The Trump administration imposed sanctions on Friday on an independent Chinese “teapot” refinery for buying billions of dollars’ worth of Iranian oil, as Washington and Tehran prepared for another round of peace talks over the weekend.
The U.S. Treasury Department targeted Hengli Petrochemical (Dalian) Refinery, describing it as one of Iran’s largest customers of crude oil and petroleum products.
The department’s Office of Foreign Assets Control also imposed sanctions on about 40 shipping companies and vessels, it said, that operate as part of Iran’s shadow fleet.
The sanctions block U.S. assets of those designated and prevent Americans from doing business with them.
Treasury Secretary Scott Bessent said the U.S. was imposing a “financial stranglehold” on the Iranian government.
“Treasury will continue to constrict the network of vessels, intermediaries, and buyers Iran relies on to move its oil to global markets,” Bessent said.
China has said it opposes “illegal” unilateral sanctions.
Its embassy in Washington said Friday that normal trade should not be harmed and called on Washington to stop “abusing” sanctions to target Chinese companies.
“We call on the U.S. to stop politicizing trade and sci-tech issues and using them as a weapon and a tool and stop abusing various kinds of sanctions to hit Chinese companies,” a Chinese embassy spokesperson said.
China buys more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler.
U.S. sanctions have deterred some larger independent refiners from buying Iranian oil. But sanctions experts have long said independent refineries have some protection from the full impact of U.S. sanctions because they have little exposure to the U.S. financial system.
They say sanctions on Chinese banks that help facilitate purchases would have a larger effect on Iranian oil sales.
Bessent told reporters at the White House on April 15 that the Treasury had written to two Chinese banks and warned them that secondary sanctions could follow if Iranian money was found flowing through their accounts.
The Trump administration last year imposed sanctions on Chinese teapot refiners Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical and Shandong Shengxing Chemical.
Those measures created hurdles for the refiners, including difficulties receiving crude and having to sell refined products under different names.
Teapot refineries account for a quarter of Chinese refinery capacity. They operate with narrow and sometimes negative margins and have recently faced pressure from weak domestic demand.
The refiners have recently had to buy Iranian oil at premiums to international Brent oil prices after Washington’s temporary waiver of sanctions on Iranian oil at sea raised expectations that India might buy more of the oil.
The U.S. allowed the waiver to expire last week.
Set as preferred source
Set as preferred source
1 min read
1 min read
