DALIAN — The U.S. Treasury Department's Office of Foreign Assets Control on April 24 added Hengli Petrochemical (Dalian) Refinery Co Ltd to its Specially Designated Nationals and Blocked Persons List over purchases of Iranian crude oil. The agency described the company as China's second-largest independent "teapot" refiner and as "one of Tehran's most valued customers."

The Office of Foreign Assets Control said the refiner generated hundreds of millions of dollars for Iran's military through crude purchases and that, since at least 2023, it had received more than five million barrels of Iranian crude from multiple sanctioned shadow-fleet vessels. The U.S. also sanctioned around 40 shipping firms and vessels alleged to be operating as part of Iran's shadow fleet, registered in jurisdictions including Hong Kong, mainland China, the United Arab Emirates, Vietnam and Malaysia.

Hengli Petrochemical Co operates a 20-million-tonne-per-year refining and petrochemical complex on Dalian's Changxing Island, one of China's four major private refining projects alongside those led by Zhejiang Petroleum and Chemical Co Ltd and Shenghong Petrochemical Group. The refinery is owned by Fan Hongwei, who is listed among China's wealthiest self-made women on the Hurun Rich List.

The company said it has always operated in full compliance with applicable laws and regulations and has never traded with Iran, adding that all its suppliers certify their crude is sourced from jurisdictions not under U.S. sanctions. It said operations remain normal with high utilization rates, production and sales proceeding as planned, and crude inventories sufficient for more than three months with procurement unaffected. In 2025, the company's revenue fell 14.9% year-on-year to 201 billion yuan (US$28 billion), while net profit rose 0.4% to 7.1 billion yuan.

"China opposes illicit unilateral sanctions that have no basis in international law. We urge the US to stop willfully slapping sanctions and using long-arm jurisdiction. China will firmly defend the lawful rights and interests of Chinese companies," said Lin Jian, spokesperson of the Chinese Foreign Ministry.

Columnist Hua Xiangming questioned the basis for the designation. "The so-called evidence chain is highly ambiguous," he said. "Many in the international community see this as an attempt to gain leverage at the negotiating table."

U.S. Treasury Secretary Scott Bessent said Washington had warned banks across multiple jurisdictions, including two in Hong Kong, about potential secondary sanctions if they process transactions linked to Iran. A U.S. federal court in New York ordered five major global banks—HSBC, Standard Chartered, JPMorgan, Citibank and Bank of New York Mellon—to hand over documents in a civil case linked to alleged Iran sanctions evasion. The banks are not accused of wrongdoing and are involved only in their capacity as correspondent lenders.