China buys oil amid Iran tensions

China has remained the main buyer of Iranian oil as tensions around Tehran and U.S. pressure on its customers have intensified. U.S. Treasury said on April 28 that China buys about 90% of Iran’s oil exports, with most of those barrels handled by independent “teapot” refineries in Shandong province. Beijing has rejected the sanctions campaign, and on May 2 its Commerce Ministry issued an injunction blocking U.S. measures on five Chinese refiners, according to Reuters. The dispute has turned a long-running sanctions issue into a direct test of how far Washington will go against Chinese buyers and how openly China will shield them. ### How much Iranian oil is China buying? March 2026 is the key data point. Reuters reported on April 29, citing Vortexa Analytics, that China imported a record 1.8 million barrels per day of Iranian crude in March. U.S. Treasury has separately said China purchases about 90% of Iran’s oil exports, and that teapot refiners account for the majority of those imports. April 28 brought the clearest U.S. official description of the trade. Treasury’s Office of Foreign Assets Control said Chinese independent refiners, mainly in Shandong, continued to import and refine Iranian crude and warned banks about sanctions risk tied to those transactions. Treasury said the trade uses front companies, intermediary brokers and a “shadow fleet” that relies on ship-to-ship transfers, falsified documents and vessel identity manipulation. (usnews.com) ### Who in China is buying it? Shandong’s independent refiners are central to the trade. Treasury and State have both focused on so-called teapot refineries and related terminals, saying they are the main conduit for Iranian barrels into China. Reuters reported that earlier U.S. actions had mostly targeted smaller refiners and supply-chain operators before Washington moved against a larger player this spring. (home.treasury.gov) April 29 marked that escalation. Reuters reported that the U.S. sanctioned Hengli Petrochemical (Dalian) Refinery, accusing it of buying billions of dollars in Iranian oil. Reuters said Hengli runs a 400,000 barrel-per-day refining complex in Dalian, making it the largest Chinese refiner singled out by Washington since the United States renewed its crackdown on Iranian oil exports in 2019. Hengli denied doing business with Iran and said the sanctions lacked factual and legal basis. (home.treasury.gov) May 1 added a logistics target. The U.S. State Department said it sanctioned Qingdao Haiye Oil Terminal Co., Ltd., a China-based terminal operator that it said had imported tens of millions of barrels of sanctioned Iranian crude since the February 2025 national security memorandum that revived “maximum pressure.” State said Qingdao Haiye received dozens of shipments in 2025 and linked the flows to ship-to-ship transfers near Singapore. (usnews.com) ### How is the oil getting into China? Singapore-area transfers are one recurring route. State said Qingdao Haiye accepted cargoes from vessels involved in ship-to-ship transfers of Iranian-origin crude off Singapore’s eastern outside port limits, which Washington identified as a hotspot for illicit transfers. Treasury said the broader network also uses front companies in Asia and the United Arab Emirates, brokers and deceptive shipping practices. (state.gov) March 2025 showed how resilient demand could be before the latest 2026 moves. Reuters reported last year that China’s imports of Iranian oil surged as buyers stocked up ahead of possible tighter sanctions, and U.S. officials later cited that pattern as part of the case for broader enforcement. ### How has Beijing answered Washington? (state.gov) May 2 brought China’s clearest formal response. Reuters reported that China’s Commerce Ministry issued an injunction blocking U.S. sanctions on five Chinese refiners accused of buying Iranian oil. The named companies included Hengli Petrochemical (Dalian) Refinery, Hebei Xinhai Chemical Group, Shandong Jincheng Petrochemical Group, Shandong Shouguang Luqing Petrochemical and Shandong Shengxing Chemical. (sahmcapital.com) May 11 brought a broader public line from Beijing. Reuters reported that Chinese foreign ministry spokesperson Guo Jiakun called U.S. sanctions on China-based firms illegal and unilateral and said China would firmly safeguard the legitimate rights and interests of Chinese enterprises. That position is consistent with Beijing’s long-standing refusal to recognize U.S. unilateral sanctions on Iranian oil trade. (money.usnews.com) ### What is Washington doing next? Since March 2025, Treasury has designated multiple China-based teapot refiners and warned that it is prepared to use secondary sanctions against foreign financial institutions that continue to support Iran-related activity. State said on May 1 that its latest action was the 12th round of sanctions targeting Iranian oil sales since February 4, 2025. (al-monitor.com) The next pressure points are banks, terminals and large refiners. Treasury’s April 28 alert told financial institutions to apply enhanced due diligence to China-based refinery transactions, especially in Shandong, and State said it would continue to intensify economic pressure on the network sustaining Iran’s energy trade. (home.treasury.gov)