China issues blocking order against U.S. Iran-oil sanctions on five domestic refiners

BEIJING, May 2, 2026 — China’s Ministry of Commerce said it has issued a blocking order against U.S. sanctions imposed on five Chinese companies over alleged involvement in Iranian oil transactions, prohibiting parties in China from recognizing, enforcing or complying with those U.S. measures. The order took effect on publication.

The ministry said the U.S. measures, which include placement on the Specially Designated Nationals list, asset freezes and transaction bans, amounted to an “improper extraterritorial application” of foreign law under China’s national security, foreign relations and anti-foreign sanctions framework, as well as its rules on blocking unjustified extraterritorial measures.

The order names Hengli Petrochemical (Dalian) Refinery Co. Ltd., Shandong Shouguang Luqing Petrochemical Co. Ltd., Shandong Jincheng Petrochemical Group Co. Ltd., Hebei Xinhai Chemical Group Co. Ltd. and Shandong Shengxing Chemical Co. Ltd.

The move follows U.S. Treasury action targeting Chinese “teapot” refiners for allegedly purchasing Iranian crude and petroleum products. On April 24, the Treasury sanctioned Hengli Petrochemical (Dalian) Refinery Co. Ltd. and said Chinese independent refiners play a vital role in sustaining Iran’s oil economy. Treasury also issued an alert on April 28 warning financial institutions about sanctions risks linked to China-based independent refineries involved in Iranian crude imports.

The Chinese order appears to be a significant escalation in Beijing’s use of its legal countermeasures regime because it formally directs non-recognition and non-compliance with the U.S. sanctions cited in the notice, including measures tied to Executive Orders 13902 and 13846. That raises the prospect of direct conflict for companies exposed to both Chinese jurisdiction and U.S. sanctions enforcement.