China Directs Firms to Bypass U.S. Sanctions on Iranian Oil-Linked Refiners

U.S. sanctions targeting private refiners linked to the Iranian oil trade, Fortune reported. S. sanctioned last month.

U.S. Measures unlawfully restrict normal trade with third countries and breach international norms. The order deploys a blocking measure China introduced in 2021 to protect its firms from foreign laws it deems unjustified.

U.S. Sanctions, refiners such as Hengli face asset freezes and transaction bans. Hengli, located in the northeastern province of Liaoning, is a major private processor with a sprawling oil-processing and chemicals complex. 4 billion) for itself and all units this year, some on a revolving basis.

Lenders working with Hengli and related companies have been seeking clarity from the banking regulator amid the decision, with public holidays in China providing some time as business is on hold. The Treasury Department's Office of Foreign Assets Control has provided a grace period.

U.S. Sanctions imposed on particular Chinese firms. He added that its central objective is to nullify their legal effect within Chinese territory, rather than simultaneously resorting to more aggressive retaliatory measures. Under the blocking order, companies can apply for exemptions if compliance would cause exceptional hardship or inconvenience.

U.S. measures since 2025 targeting Chinese industries from refining to shipping on grounds of involvement in Iranian oil transactions. Cui Fan, a professor who has previously advised the Commerce Ministry, said such measures have become increasingly disruptive, expanding in scope and showing a trend of escalation that could jeopardize China's energy security and development interests.

China has long been the largest buyer of Tehran's oil shipments, many arriving indirectly through private refiners and turned into gasoline, diesel and other products, though Chinese customs data do not reflect the trade, with the last official shipment recorded several years ago.

's $2 billion purchase of AI startup Manus last week, scuttling the deal even after it had been sealed. This action reflects Beijing's progressive use of tools to counter foreign measures.

The developments precede a meeting between President Donald Trump and Xi Jinping scheduled later this month. S. financial system than state refiners.

U.S. authorities. S. extends secondary sanctions to those institutions or major state-owned entities, Beijing would likely respond with more forceful countermeasures.

U.S. S. long-arm jurisdiction.

Ja Ian Chong, an associate professor of political science at the National University of Singapore, said the action should be seen in the context of increasing controls and is not a one-off. While the blocking measure is not likely to derail the Trump-Xi summit, Washington's reaction will indicate potential escalation, according to analysts from Eurasia Group.

U.S. Efforts to cut off Tehran's oil revenue focused on smaller Chinese companies and facilities, wary of economic and diplomatic fallout. Hengli represents the most modern of China's private refiners. The Chinese government has consistently opposed unilateral sanctions lacking United Nations authorization and a basis in international law, the Commerce Ministry said.