WASHINGTON — President Donald Trump's administration imposed economic sanctions on a China-based oil refinery and roughly 40 shipping companies and tankers involved in transporting Iranian oil. The action followed a presidential threat to impose secondary sanctions on companies and countries that do business with Iran.

Hengli Petrochemical's facility in the port city of Dalian, with a processing capacity of roughly 400,000 barrels of crude oil per day, was included in the sanctions. According to the Treasury Department, the Dalian facility has received Iranian crude oil shipments since 2023 and has generated hundreds of millions of dollars in revenue for the Iranian military.

The Treasury Department also imposed sanctions on about 40 shipping firms and vessels alleged to operate as part of Iran's shadow fleet. The sanctions cut off the designated companies from the U.S. financial system and penalize anyone who does business with them. The measures were announced weeks before Trump and China's Xi Jinping are due to meet in China.

"We will continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets," Treasury Secretary Scott Bessent said. "Any person or vessel facilitating these flows – through covert trade and finance – risks exposure to US sanctions," he added.

Liu Pengyu, spokesperson for China's embassy in Washington, objected to the action. During a White House press briefing on April 15, Bessent had said, "If you are buying Iranian oil, if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure." Liu said, "The use of the sanctions undermines international trade order and rules, disrupts normal economic and trade exchanges, and infringes upon the legitimate rights and interests of Chinese companies and individuals."

China imported 80 to 90 percent of Iranian oil before the U.S.-Israeli war with Iran broke out. Iranian oil is sometimes transported by a shadow fleet of vessels that obscure its origin, with shipments often arriving in China labeled as originating from countries such as Malaysia. According to United Against Nuclear Iran, as of February 2025, Hengli is one of dozens of Chinese purchasers of Iranian oil.

China has disagreed with previous U.S. sanctions, but its major companies and banks continue to comply because they are exposed to the U.S.-dominated financial system. Last year, the Treasury Department sanctioned Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical and Shandong Shengxing Chemical.