China blocks US sanctions on five independent oil refineries accused of Iranian oil trade
Primary region China
Tags Political economy · Diplomacy
Regions China · US
China's Ministry of Commerce issued an injunction on May 2, 2026 blocking US sanctions on five Chinese independent 'teapot' refineries accused of buying Iranian oil. The five refineries are Hengli Petrochemical (Dalian), Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical. The US Treasury sanctioned Hengli on April 24, calling it 'one of Tehran's most valued customers' generating hundreds of millions for the Iranian military. China's order stipulates the US cannot recognize, implement, or comply with the sanctions against these five companies. This is the first application of China's 'Blocking Rules' designed to counter foreign long-arm jurisdiction. China buys more than 80% of Iran's shipped oil, and teapot refineries account for a quarter of Chinese refining capacity.
Strategic interpretation
China's use of its Blocking Rules marks a significant escalation in its resistance to US unilateral sanctions and signals Beijing's willingness to legally shield companies from American enforcement. The move directly challenges US efforts to curb Iranian oil revenue and tests Washington's ability to enforce secondary sanctions. Coming weeks before the Trump-Xi summit, it signals Beijing's intent to negotiate from a position of strength on trade and sanctions policy.