China Tells Companies to Ignore US Sanctions on Five Iranian-Linked Refiners

China’s commerce ministry has directed domestic companies not to recognize or comply with US sanctions imposed on five privately owned Chinese refiners linked to Iranian oil imports. The blocking order, issued under a 2021 statute designed to counter the extraterritorial application of foreign laws, was released on Saturday.

It permits affected Chinese entities to sue in local courts for compensation from any party that adheres to the US measures.

The US sanctions, which include asset freezes and transaction bans, were first applied to one refiner last month and extended to the others more recently. The refiners process Iranian crude into gasoline and diesel. China remains the largest buyer of Iranian oil, with shipments frequently routed through these private processors in ways that do not appear in official Chinese customs data.

The targeted facilities form a significant share of China’s independent refining sector, known as “teapots,” which accounts for roughly one-third of national refining capacity and is concentrated in provinces including Liaoning and Shandong.

” The ministry added that it will continue to monitor the improper extraterritorial application of foreign laws and take further steps when necessary. The blocking statute does not alter China’s international obligations or its protections for foreign investors, according to the same statement.

The order was issued weeks before a planned summit between President Trump and Chinese President Xi Jinping, the first US presidential visit to China in eight years. The meeting, originally delayed by conflict involving Iran, is expected to address trade, energy security and sanctions.

The vessels’ operators have not been publicly identified by the US government in the sanctions announcements covered by the sources. No publicly released evidence has documented direct Iranian government ownership of the five refiners.