US imposes sanctions on Chinese teapot refinery over Iranian oil purchases

US Sanctions Chinese Refinery Over Iranian Oil Purchases

The US Treasury Department has imposed sanctions on Hengli Petrochemical (Dalian) Refinery, China’s second-largest oil refinery, for purchasing hundreds of millions of dollars’ worth of Iranian crude oil. The refinery is considered one of Tehran’s most valued customers and has generated significant revenue for the Iranian military.

As part of the sanctions, the US Treasury also targeted approximately 40 shipping firms and vessels allegedly operating as part of Iran’s shadow fleet. China’s embassy in Washington, DC expressed concerns over the move, stating that it should not be used to “politicise trade and sci-tech issues” or “abuse various kinds of sanction”.

The sanctions come amid heightened tensions between the US and Iran, with the US Navy blockading Iranian ports since April 13. China relies heavily on Middle Eastern oil imports, purchasing over 80% of Iran’s shipped oil last year.

Hengli Refinery is a privately owned, small refinery based in Shandong province, which plays a key role in boosting China’s oil supplies by importing and stockpiling discounted Iranian and Russian oil. The US Treasury Secretary has pledged to continue targeting the network of vessels, intermediaries, and buyers that facilitate Iran’s oil exports.

The sanctions have added financial pressure on teapot refineries, which are facing high replacement prices in a market already strained by global tensions. This is not the first time the US has targeted China’s independent refineries, with previous sanctions imposed last year on several companies.

Source: Al Jazeera