China’s Ministry of Commerce issued a formal blocking order Saturday prohibiting domestic entities from complying with US sanctions targeting five Chinese oil refineries accused of purchasing Iranian crude — the first time Beijing has invoked its blocking statute against Washington, escalating from diplomatic protest to active legal countermeasure.
The order covers Hengli Petrochemical (Dalian) Refinery, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical — all independent processors known as “teapot” refineries that operate outside China’s state-owned oil giants and rely heavily on discounted Iranian crude.
The ministry stated the sanctions “shall not be recognized, enforced, or complied with,” saying the order was a move to “safeguard national sovereignty, security, and development interests.” It took effect immediately.
Beijing grounded the order in the National Security Law, the Law on Foreign Relations, the Anti-Foreign Sanctions Law, and the 2021 Blocking Rules — a framework designed to neutralize the extraterritorial reach of foreign legislation — after a review confirmed the US measures constituted improper extraterritorial application of American law.
The US Treasury Department designated Hengli Petrochemical on April 24, calling it “one of Tehran’s most valued customers” and accusing it of generating hundreds of millions of dollars in revenue for the Iranian military.
Washington placed the remaining four refineries on its Specially Designated Nationals list in earlier rounds dating to 2025. On May 1, the US also sanctioned Qingdao Haiye Oil Terminal Co. for importing tens of millions of barrels of Iranian crude; that firm fell outside Beijing’s injunction.
According to commodities data firm Kpler, China purchased more than 80% of all oil Iran exported in 2025. The US has mounted at least 12 rounds of Iran oil sanctions since February 2025, targeting teapot refineries, shadow fleet vessels, and terminal operators — a campaign the State Department describes as aimed at cutting off Tehran’s primary revenue source.
Saturday’s order is Beijing’s first conversion of its longstanding opposition to unilateral sanctions into binding domestic legal instruction.
Trump is expected to visit China and hold talks with President Xi Jinping later this month, as US-Iran ceasefire negotiations remain stalled.
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