US Sanctions China-Based Oil Refinery and 40 Shippers Over Iranian Oil Trade

Apr 25, 2026

The Trump administration on Friday imposed economic sanctions on Hengli Petrochemical's Dalian facility, one of China's biggest independent refineries with 400,000 barrels per day capacity, along with roughly 40 shipping companies and tankers transporting Iranian oil. The sanctions target entities that have generated hundreds of millions of dollars in revenue for Iran's military since 2023, cutting them off from the U.S. financial system as part of a ramped-up campaign to choke off Iran's oil export revenue during the ongoing Persian Gulf war. The move comes as China, which imported 80-90% of Iranian oil before the conflict, faces pressure from U.S. threats of secondary sanctions against financial institutions, with a Trump-Xi meeting scheduled weeks after the announcement. The global energy trade remains in turmoil from the conflict and a U.S. blockade of the Strait of Hormuz, causing oil prices to soar and prompting emergency waivers on Russian and Iranian oil already at sea.

US Sanctions on China-Based Oil Refinery and Shipping Companies

▪Hengli Petrochemical's Dalian facility has a processing capacity of roughly 400,000 barrels of crude oil per day
▪Hengli Petrochemical has generated hundreds of millions of dollars in revenue for the Iranian military according to the Treasury Department
▪Hengli Petrochemical's Dalian facility is one of the biggest independent refineries in China
▪The U.S. Treasury Department sent a letter to financial institutions in China, Hong Kong, the UAE and Oman earlier in April 2026 threatening to levy secondary sanctions for doing business with Iran
▪President Donald Trump's administration placed economic sanctions on a major China-based oil refinery and roughly 40 shipping companies and tankers involved in transporting Iranian oil
▪Hengli Petrochemical has received Iranian crude oil shipments since 2023 according to the Treasury Department
▪Hengli Petrochemical's facility in the port city of Dalian was included in the Friday sanctions
▪The U.S. imposed a physical blockade on the Strait of Hormuz in April 2026

China's Role in Iranian Oil Trade

▪President Donald Trump and China's Xi Jinping are due to meet in China a few weeks after the April 2026 sanctions announcement
▪United Against Nuclear Iran said in February 2025 that Hengli Petrochemical is one of dozens of Chinese purchasers of Iranian oil
▪China imported 80% to 90% of Iranian oil before the U.S.-Israeli war with Iran broke out

Impact on Global Energy Markets and US-Iran Conflict

▪War around the Persian Gulf is causing oil and natural gas prices to soar
▪The Trump administration's sanctions on Iranian oil trade are part of a ramped-up campaign to cut off Iran's key source of revenue from oil exports
▪The global energy trade is in turmoil as war around the Persian Gulf chokes off oil and natural gas shipments
▪The Strait of Hormuz is a Persian Gulf waterway that is crucial to global energy supplies