US Imposes Sanctions on Chinese 'Teapot' Refinery for Buying Iranian Oil
The Trump administration targets Hengli Petrochemical (Dalian) Refinery and about 40 shipping companies for their dealings with Iran.
On Friday, the Trump administration imposed sanctions on an independent "teapot" refinery in China for purchasing billions of dollars' worth of Iranian oil.
This move comes as Washington and Tehran prepare to engage in further peace talks over the weekend.
The US Treasury Department targeted Hengli Petrochemical (Dalian) Refinery, which is reportedly one of Iran's largest customers for crude oil and petroleum products.
Additionally, the department's Office of Foreign Assets Control sanctioned approximately 40 shipping companies and vessels operating as part of Iran's "shadow fleet".
China has expressed opposition to these "illegal" unilateral sanctions.
The Chinese embassy in Washington stated that normal trade should not be compromised and urged the US to cease using sanctions as a means to target Chinese companies.
This follows similar sanctions imposed by the Trump administration last year on teapots Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical.
These sanctions created difficulties for the affected refiners, including issues with receiving crude oil and selling refined products under different names.
Teapots account for a quarter of Chinese refinery capacity and often operate with narrow margins.
Despite these challenges, China remains one of the largest buyers of Iranian oil, purchasing over 80% of Iran's exported oil, according to data from analytics firm Kpler.
However, experts suggest that independent refineries are somewhat immune to the full impact of US sanctions due to their limited exposure to the US financial system.
The imposition of sanctions on Chinese banks facilitating these purchases would likely have a more significant effect on Iranian oil imports.
Treasury Secretary Scott Bessent emphasized that the US is exerting a "financial stranglehold" on the Iranian government, with plans to further constrict Iran's network of vessels, intermediaries, and buyers.
Bessent revealed that the Treasury has contacted two Chinese banks, warning them of potential secondary sanctions if evidence of Iranian money flowing through their accounts is found.
In recent months, teapot refiners have had to purchase Iranian oil at premiums above international Brent oil prices due to expectations that India might increase its Iranian oil purchases following the expiration of a temporary US waiver on Iranian oil at sea.
This move comes as Washington and Tehran prepare to engage in further peace talks over the weekend.
The US Treasury Department targeted Hengli Petrochemical (Dalian) Refinery, which is reportedly one of Iran's largest customers for crude oil and petroleum products.
Additionally, the department's Office of Foreign Assets Control sanctioned approximately 40 shipping companies and vessels operating as part of Iran's "shadow fleet".
China has expressed opposition to these "illegal" unilateral sanctions.
The Chinese embassy in Washington stated that normal trade should not be compromised and urged the US to cease using sanctions as a means to target Chinese companies.
This follows similar sanctions imposed by the Trump administration last year on teapots Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical.
These sanctions created difficulties for the affected refiners, including issues with receiving crude oil and selling refined products under different names.
Teapots account for a quarter of Chinese refinery capacity and often operate with narrow margins.
Despite these challenges, China remains one of the largest buyers of Iranian oil, purchasing over 80% of Iran's exported oil, according to data from analytics firm Kpler.
However, experts suggest that independent refineries are somewhat immune to the full impact of US sanctions due to their limited exposure to the US financial system.
The imposition of sanctions on Chinese banks facilitating these purchases would likely have a more significant effect on Iranian oil imports.
Treasury Secretary Scott Bessent emphasized that the US is exerting a "financial stranglehold" on the Iranian government, with plans to further constrict Iran's network of vessels, intermediaries, and buyers.
Bessent revealed that the Treasury has contacted two Chinese banks, warning them of potential secondary sanctions if evidence of Iranian money flowing through their accounts is found.
In recent months, teapot refiners have had to purchase Iranian oil at premiums above international Brent oil prices due to expectations that India might increase its Iranian oil purchases following the expiration of a temporary US waiver on Iranian oil at sea.
