US targets Iran's oil trade with new sanctions on Chinese refinery

The US sanctioned China's Hengli Petrochemical refinery and 40 shipping firms in Iran's shadow fleet. This move, part of the 'Economic Fury' campaign, aims to disrupt Tehran's main revenue stream from oil and petrochemical sales.

The United States intensified its campaign to disrupt the primary revenue streams of the Iranian regime as Economic Fury targeted global networks fueling Iran's oil trade and shadow fleet. The U.S. Department of the Treasury's Office of Foreign Assets Control, known as OFAC, sanctioned the China-based independent teapot refinery, Hengli Petrochemical (Dalian) Refinery Co., Ltd., on Friday, April 24. According to the US Treasury Department, the refinery is one of Iran's largest customers for crude oil and petroleum products, having purchased billions of dollars' worth of Iranian energy exports. The Treasury simultaneously targeted approximately 40 shipping firms and vessels that operate as part of a shadow fleet. These vessels provide a financial lifeline to the regime by transporting petroleum and petrochemicals to global markets.

US Strategy to Disrupt Iranian Revenue

The US sanctions are part of a broader strategy to disrupt the revenue that enables Tehran's activities across the Middle East. Since February 2025, OFAC has sanctioned over 1,000 Iran-related persons, vessels, and aircraft as part of this campaign of maximum economic pressure. "Economic Fury is imposing a financial stranglehold on the Iranian regime, hampering its aggression in the Middle East, and helping to curtail its nuclear ambitions," said Secretary of the Treasury Scott Bessent. "At President Trump's direction, Treasury will continue to constrict the network of vessels, intermediaries, and buyers Iran relies on to move its oil to global markets. Any person or vessel facilitating these flows--through covert trade and finance--risks exposure to U.S. sanctions."

Hengli Petrochemical's Role in Iranian Oil Trade

As per the Treasury, China's independent oil refineries, colloquially known as teapots, purchase the majority of Iran's crude oil. Hengli Petrochemical, which is the second-largest teapot refinery in China, emerged as a valued customer for Tehran. Since at least 2023, the refinery received Iranian oil cargoes from several sanctioned shadow fleet vessels, including the BIG MAG, the GALE, and the ARES. These three vessels alone delivered over five million barrels of Iranian crude oil to the facility.

Transactions with Iran's Armed Forces

The Treasury also highlighted that beyond commercial trade, the refinery played an outsized role in purchasing oil from Iran's armed forces. It reported that Hengli received shipments overseen by Sepehr Energy Jahan Nama Pars Company, which is the oil sales arm of Iran's Armed Forces General Staff. These transactions generated hundreds of millions of dollars for the Iranian military.

Legal Basis for Sanctions

"Today's action is being taken pursuant to Executive Order (E.O.) 13902, which targets persons operating in Iran's petroleum and petrochemical sectors and is in furtherance of the President's National Security Presidential Memorandum 2 (NSPM-2), which undergirds Treasury's continued campaign of maximum economic pressure against Iran's shadow banking, money laundering, and sanctions evasion networks," the Treasury Department stated.

Market Impact on Hengli Petrochemical

At the time of filing this report, shares of Hengli Petrochemical stood at 21.10 CNY, down by 2.34 CNY or (-9.98%) after the imposed sanctions on Friday. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)