Treasury sanctions Hengli refinery

The U.S. Treasury on April 24 sanctioned Hengli Petrochemical (Dalian) Refinery Co., Ltd. and about 40 shipping firms and vessels it says helped move Iranian oil. (treasury.gov) Treasury said Hengli is one of Iran’s largest customers for crude oil and other petroleum products and has bought billions of dollars’ worth of Iranian petroleum. The action was taken by the Office of Foreign Assets Control under Executive Order 13902. (treasury.gov) (ofac.treasury.gov) The Treasury release said Hengli had received Iranian cargoes since at least 2023 from sanctioned “shadow fleet” tankers including BIG MAG, GALE and ARES. Those three vessels alone delivered more than five million barrels of Iranian crude oil, according to Treasury. (treasury.gov) Hengli’s Dalian refinery has capacity of roughly 400,000 barrels a day, making it one of China’s biggest independent refineries. Treasury described it as China’s second-largest “teapot” refinery, using the industry term for privately run plants outside the big state groups. (apnews.com) (treasury.gov) The sanctions are part of a wider U.S. effort to squeeze Iran’s oil revenue by targeting not just producers, but the ships, trading firms and buyers that keep exports moving. Treasury said it has sanctioned more than 1,000 Iran-related people, vessels and aircraft since February 2025. (treasury.gov) Reuters reported that China buys more than 80% of Iran’s seaborne oil, citing 2025 data from analytics firm Kpler. It also reported that teapot refiners account for about a quarter of China’s refining capacity and often operate on narrow margins. (cnbc.com) Beijing pushed back on the move. China’s embassy in Washington said normal trade should not be harmed and called on the United States to stop “abusing” sanctions to target Chinese companies, according to Reuters. (cnbc.com) Hengli also denied the allegation after the designation. In a stock exchange filing reported by Reuters on April 26, the company said it had “never engaged in any trade with Iran,” that suppliers guaranteed the crude’s origin was outside U.S. sanctions, and that it had more than three months of inventory. (ndtvprofit.com) (filingreader.com) OFAC also issued General License V, which authorizes the wind-down of transactions involving Hengli Petrochemical (Dalian) Refinery Co., Ltd. That gives counterparties a limited path to exit business while the designation takes effect. (ofac.treasury.gov) The immediate test is whether Washington stops at refiners and tankers or reaches banks and other intermediaries that handle payments. Treasury Secretary Scott Bessent said this month the U.S. had warned two Chinese banks that they could face secondary sanctions if Iranian money flowed through their accounts. (cnbc.com)