Full Breakdown
U.S. Imposes Secondary Sanctions on Chinese Refinery and Shipping Network Over Iranian Oil
4/25/2026, 1:43:41 PM
Core Sanctions Announcement
The U.S. Treasury announced secondary sanctions on Hengli Petrochemical’s Dalian refinery—capable of processing roughly 400,000 barrels of crude per day—and on about 40 shipping companies and tankers that have moved Iranian crude. The measures block the listed entities from the U.S. financial system and penalize any secondary parties that continue business with them.
Background: U.S. Campaign to Cut Iran’s Oil Revenue
The sanctions follow a broader Trump-administration strategy to deprive Tehran of oil income. Earlier in the month, the United States imposed a physical blockade of the Strait of Hormuz and issued temporary waivers for Russian oil and for Iranian cargo already at sea, aiming to limit price spikes while maintaining pressure on Iran’s export network.
Key Actors
- Scott Bessent, U.S. Treasury Secretary
- Hengli Petrochemical, Dalian-based refinery
- United Against Nuclear Iran, advocacy group identifying Chinese purchasers of Iranian oil
- Liu Pengyu, spokesperson for China’s embassy in Washington
- Shadow-fleet vessels and smaller “teapot” refineries that obscure oil origins
Data & Statistics
- Hengli’s processing capacity: ~400,000 bpd
- Approximate number of sanctioned shipping firms: 40
- China’s share of Iranian oil imports: 80-90 % (pre-war estimate)
- Iranian crude shipments to Hengli have occurred since 2023, generating “hundreds of millions of dollars” for the Iranian military, according to the Treasury.
Official Statements & Responses
Treasury Secretary Bessent said the United States will “continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets.” He also warned that any bank holding Iranian funds will face “secondary sanctions, which is a very stern measure.” The Treasury earlier sent letters to financial institutions in China, Hong Kong, the UAE and Oman threatening similar actions.
China’s embassy, through spokesperson Liu Pengyu, condemned the sanctions as “undermining international trade order and rules, disrupting normal economic and trade exchanges, and infringing upon the legitimate rights and interests of Chinese companies and individuals.”
Criticism & Opposition
The Chinese embassy’s statement frames the sanctions as a breach of established trade norms. Despite official objections, many Chinese firms and banks continue to comply with U.S. restrictions because of their reliance on the U.S.-dominated financial system. United Against Nuclear Iran highlighted Hengli as one of dozens of Chinese entities purchasing Iranian oil, underscoring concerns about the breadth of the illicit network.
Conflicting Reports & Gaps
Sources differ on precise figures: China’s import share is given as a range (80-90 %), and the number of sanctioned shippers is described only as “roughly 40.” No direct comment from senior Chinese officials beyond the embassy spokesperson was obtained, leaving the full governmental response unclear.
Verbatim Quotes
- “will continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets.” — Scott Bessent, U.S. Treasury Secretary
- “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.” — Scott Bessent, U.S. Treasury Secretary
- “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.” — Liu Pengyu, Chinese embassy spokesperson
- “The Treasury Department says Hengli has received Iranian crude oil shipments since 2023 and has generated hundreds of millions of dollars in revenue for the Iranian military.” — U.S. Treasury Department
What’s Next
President Donald Trump and Chinese President Xi Jinping are slated to meet in China within weeks, a timing that may shape further U.S. actions against the sanctioned network. U.S. officials indicate continued monitoring of the shadow-fleet and additional secondary sanctions if compliance falters, while global oil markets remain sensitive to the evolving restrictions.
