As clouds of uncertainty continues to persist over a peace deal between the United States and Iran, the US has decided to impose sanctions on a China-based oil refinery and 40 other shipping companies for their alleged involvement in transport Iranian oil. The move comes just weeks before President Donald Trump's Beijing visit where he will meet his Chinese counterpart Xi Jinping.
According to a report by The Associated Press, the Chinese refinery that has been sanctioned is Hengli Petrochemical, which is in the port city of Dalian. The facility has a capacity of processing 400,000 barrels of crude oil each day, which makes it one of the biggest independent refineries in China.
Hengli has been processing Iranian oil since 2023, which has helped it generate millions of dollars in revenue. The firm also remains one of the dozens of Chinese purchasers of Iranian oil, the advocacy group United Against Nuclear Iran had said in February last year.
China, which is yet to react to the US move, is one of the biggest procures of Iranian oil. Before the conflict started on February 28 in the Middle East, China would import 80 to 90 per cent of Iranian oil though a shadow fleet of vessels. The origin of these vessels remain obscure, but The Associated Press said that they likely arrive in China from countries such as Malaysia.
The US sanctions against Iran
The US had earlier warned countries against procuring Iranian oil. In a media briefing earlier this month, US Treasury Secretary Scott Bessent told countries “that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure.”
Later, the treasury department also sent a letter to China, the United Arab Emirates (UAE), Oman and Hong Kong, warning that the US may levy secondary sanctions on them for doing business with Iran. It had also accused them of allowing Iranian illicit activities to flow through their financial institutions.
In response, Iran criticised the sanctions and demanded they should be lifted. Iran was also supported by China, even though Beijing's major companies and banks comply with the US sanctions, which Liu Pengyu, a spokesperson for China’s embassy in Washington, said “undermines international trade order and rules, disrupts normal economic and trade exchanges, and infringes upon the legitimate rights and interests of Chinese companies and individuals.”
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