US Sanctions China Refinery Over Iran Oil Trade in Major Crackdown

The Treasury Department said its Office of Foreign Assets Control (Office of Foreign Assets Control) targeted Hengli Petrochemical (Dalian) Refinery Co., Ltd., describing it as one of Iran's largest buyers of crude oil and petroleum products.

"Economic Fury is imposing a financial stranglehold on the Iranian regime, hampering its aggression in the Middle East, and helping to curtail its nuclear ambitions," Treasury Secretary Scott Bessent said.

The move also targets about 40 shipping firms and vessels linked to what US officials call Iran's "shadow fleet". The Treasury said these ships transport oil and petrochemicals to global markets, providing a financial lifeline to Iran's government.

"At President Trump's direction, Treasury will continue to constrict the network of vessels, intermediaries, and buyers Iran relies on to move its oil to global markets," Bessent said, referring to Donald Trump. "Any person or vessel facilitating these flows-through covert trade and finance-risks exposure to US sanctions."

Treasury officials said China's independent refineries, known as "teapots", purchase most of Iran's crude oil. Hengli, identified as China's second-largest such refinery, has bought "billions of dollars' worth" of Iranian petroleum.

The statement said Hengli has received shipments linked to sanctioned vessels and to Iran's Armed Forces General Staff through Sepehr Energy Jahan Nama Pars Company, generating "hundreds of millions of dollars in revenue for the Iranian military".

In a parallel move, the US sanctioned 19 vessels accused of transporting billions of dollars in Iranian crude oil, liquefied petroleum gas and other petrochemical products. These vessels operated under flags from jurisdictions including Panama, Hong Kong and Barbados.

Some tankers were cited for delivering millions of barrels of Iranian oil to China, while others transported cargoes to the United Arab Emirates and Bangladesh. The Treasury said the vessels engaged in activities such as ship-to-ship transfers to conceal the origin of the oil.

The action was taken under Executive Order 13902, which targets Iran's petroleum and petrochemical sectors. It forms part of a broader campaign of economic pressure on Tehran's oil exports and financial networks.

Since February 2025, the Treasury said it has sanctioned more than 1,000 Iran-related individuals, entities, vessels and aircraft as part of that campaign.

Under US law, all property and interests of designated entities within US jurisdiction are blocked. Transactions involving these parties are generally prohibited for US persons, and foreign entities risk penalties for facilitating such activity.

The Treasury warned that violations could lead to civil or criminal penalties. It also said financial institutions and others could face sanctions exposure for engaging in transactions involving designated entities.

- IANS