China Declares Five Firms Exempt from U.S. Iran Oil Sanctions

China is a major buyer of Iranian crude, mainly through small independent refineries known as "teapot" plants that rely on discounted oil. The United States has tightened sanctions on these buyers to cut revenue to Tehran. On May 2, China’s Commerce Ministry announced it will not recognize or comply with the U.S. measures, calling them a violation of international law.

The ministry’s injunction lists five specific companies exempt from the U.S. sanctions: three in Shandong province—Shandong Jincheng Petrochemical Group, Shandong Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical—and two elsewhere in China—Hengli Petrochemical (Dalian) Refinery and Hebei Xinhai Chemical Group. Separately, on May 1 the United States sanctioned Qingdao Haiye Oil Terminal Co., Ltd., saying it imported tens of millions of barrels of Iranian oil, generating billions of dollars for Iran. That firm was not included in China’s exemption list.

The dual announcements highlight a growing split over how to enforce Iran‑related sanctions, with China shielding its domestic firms while the U.S. targets others. This tension could affect oil markets and complicate upcoming trade talks between Presidents Trump and Xi.