Trump sanctions China’s ‘teapot’ Hengli refinery over Iranian oil purchases

China is once again on the radar of the Trump administration’s crackdown. In recent development, the United States has imposed sanctions on Hengli Petrochemical refinery for importing billions of dollars’ worth of Iranian oil.

This announcement comes just after the Washington and Tehran officials are set to be involved in another round of peace talks over the weekend in Islamabad, Pakistan, as reported by Al Jazeera.

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Hengli Petrochemical Refinery is considered China’s second-largest “teapot” or independent refinery, also one of Iran’s largest customers of petroleum products and crude oil.

Given the millions of dollars worth of revenue the refinery is generating for Iran amid ongoing conflict with the US, the Treasury Department decided to target this.

The department’s Office of Foreign Assets Control issued a statement, announcing the imposition of sanctions of 40 shipping companies and vessels which are part of Iran’s shadow fleet.

US Treasury Secretary Scott Bessent said on Friday that the US will continue targeting those ships, vessels, networks, and buyer countries on which Iran’s oil economy heavily depends.

“Any person or vessel facilitating these flows – through covert trade and finance – risks exposure to US sanctions,” he said.

However, China has vehemently opposed this US’ new move, calling it “illegal unilateral sanctions.”

“We call ‌on the US to stop politicising trade and sci-tech issues and using them as a weapon and a tool and stop abusing various kinds of sanctions to hit Chinese companies,” a spokesperson from China embassy in Washington said.

These sanctions could hurt China’s energy markets and economy as Beijing imports half of its oil from the Middle East. In 2025, the world’s second largest economy purchased more than 80% of Iranian oil, as reported by Kpler, an analytics firm.

Teapot refineries hold a significant importance for China by ramping up the oil supplies through imports and stockpiling discounted Russian and Iranian oil.