China Blocks US Sanctions on Iranian Oil Buyers with New Injunction

TL;DR: China issued a prohibition order stating that US sanctions on five Chinese refineries shall not be recognized or enforced. The move follows US Treasury sanctions targeting firms accused of buying Iranian oil. The order applies to both existing and future sanctions measures related to Iranian oil purchases.

The US Treasury announced sanctions on April 24, naming Hengli Petrochemical’s Dalian refinery and four other so‑called teapot plants for allegedly purchasing crude from Iran. Washington says the measures cut off the firms from the US financial system and aim to penalize anyone dealing with them. The sanctions were part of a broader effort to curb Iran’s oil revenue amid regional tensions.

China’s Ministry of Commerce said the sanctions improperly restrict business between Chinese enterprises and third countries, violating international law and basic norms of international relations. It added that unilateral sanctions without UN authorization are consistently opposed by Beijing. The ministry called the order a necessary step to defend national sovereignty and development interests.

The ministry issued a prohibition order stating that the sanctions against the five refineries shall not be recognized, enforced, or complied with, to safeguard national sovereignty, security, and development interests. This order covers Hengli Petrochemical (Dalian) Refinery, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical and Shandong Shengxing Chemical. Beijing argues that the US measures exceed its jurisdiction and breach WTO principles.

According to commodities data firm Kpler, China purchased over 80 percent of the oil Iran exported in 2025, making it the dominant buyer of Iranian crude. The teapot refineries, which operate independently of state‑owned giants, rely heavily on discounted crude from sanctioned countries such as Iran, Russia and Venezuela. Together these facilities account for about a quarter of China’s total refining capacity.

By refusing to enforce the US measures, China aims to protect its energy supply chain and keep its smaller refineries operational amid tepid domestic demand. The move also signals Beijing’s willingness to counter unilateral sanctions it views as unlawful. Analysts note that sustained Chinese purchases could blunt the impact of US sanctions on Iran’s oil earnings.

Analysts will watch whether the US responds with secondary sanctions or diplomatic pressure, and how China’s teapot sector adapts if global oil prices shift. The outcome could influence future sanctions enforcement and Sino‑US trade relations. Market participants will also monitor any changes in Iran’s export patterns and China’s crude import volumes.