China Orders Firms to Bypass U.S. Sanctions on Iran-Linked Refiners

U.S. sanctions on five domestic refiners linked to the Iranian oil trade, deploying for the first time a blocking measure introduced in 2021 to protect firms from foreign laws deemed unjustified.

U.S. Sanctions aimed at the five companies. S. measures unlawfully restrict normal trade with third countries and breach international norms.

U.S. Last month, along with four other privately-owned processors facing asset freezes and transaction bans. 4 billion wipeout in the fortunes of Fan Hongwei and her husband Chen Jianhua, with shares of Hengli Petrochemical tumbling 10% following the sanctions.

The Chinese government has consistently opposed unilateral sanctions that lack authorization from the United Nations and a basis in international law.

A commentary on the People’s Daily app called the announcement a pivotal step in the transition of China’s foreign-related legal weapon from institutional reserves to practical application. Banks working with Hengli and other private processors are seeking clarity from the banking regulator following the order.

U.S. Treasury Department’s Office of Foreign Assets Control provided a grace period. An expected meeting between President Trump and Xi Jinping is scheduled in weeks. The refineries primarily work with Chinese banks that have not yet been directly sanctioned, according to Eurasia Group analysts led by Dominic Chiu.

U.S. sanctions, including domestic actors such as banks, investors, and downstream customers that have ceased dealings, as well as foreign firms with a presence in China, the Eurasia Group analysts said. Hengli Petrochemical is located in the northeastern province of Liaoning and represents one of the most modern of China’s private refiners with a sprawling oil-processing and chemicals complex.

The private sector accounts for as much as a third of refining capacity in China.