US Treasury warns banks over Chinese refiners using Iranian oil
Updated
Updated · The Wall Street Journal · May 2
US Treasury warns banks over Chinese refiners using Iranian oil
7 articles · Updated · The Wall Street Journal · May 2
The move follows sanctions on a Hengli Petrochemical unit and 40 shipping firms and vessels, as Washington targets China's privately run "teapot" refiners buying nearly all Iranian exports.
Analysts say the refiners' limited overseas exposure and yuan-based payments blunt sanctions, while China says unilateral US measures lack legal basis and will defend its companies.
Estimated Iranian supplies made up 12% of China's oil imports in 2025, and the covert network has expanded sharply, making a full shutdown difficult without risking higher oil prices.
As China builds a yuan-based oil trade, is the era of U.S. dollar-driven sanctions coming to an end?
Beyond oil, how is China’s military tech support for Iran reshaping security in the Middle East?
U.S. Sanctions Target China’s Hengli Petrochemical and Iran’s Shadow Fleet to Curtail $20 Billion Oil Revenue
Overview
In April 2026, the U.S. Treasury launched Operation Economic Fury, intensifying sanctions against Iran's oil exports by targeting China's Hengli Petrochemical and about 40 related entities. This move caused Hengli's shares to drop sharply and raised concerns about tightening global oil supply, potentially pushing prices to $90 per barrel. Hengli denied the allegations, while China condemned the sanctions as illegal. The campaign has significantly reduced Iran's oil production and revenue, forcing global financial institutions to increase scrutiny and face higher risks. These coordinated efforts aim to disrupt Iran's complex network of buyers and shippers that enable continued oil exports despite sanctions.