Overview
- China's commerce ministry, which on Saturday invoked its 2021 Blocking Rules for the first time, ordered firms not to follow U.S. sanctions on five refiners including Hengli Petrochemical.
- The targeted companies were placed on the U.S. Treasury’s Specially Designated Nationals list for allegedly processing Iranian oil, a step that freezes assets and restricts most global transactions.
- U.S. officials have warned banks about dealings tied to these refineries and said they are ready to use secondary sanctions, which can cut institutions off from the U.S. dollar system.
- Beijing’s order creates a compliance clash for companies and banks that face penalties in China if they honor U.S. rules and face U.S. punishment if they obey China’s directive.
- Hengli denies trading with Iran, and China’s rules allow case‑by‑case waivers, as the dispute intensifies ahead of a planned mid‑May Trump–Xi meeting and spotlights how China’s independent ‘teapot’ refiners buy Iranian crude often moved by a shadow fleet.