China blocks US sanctions against five 'teapot' refineries

China’s commerce ministry said on May 2 that it will not recognize, enforce or comply with U.S. sanctions against five Chinese refiners accused of buying Iranian oil, in a direct response to Washington’s latest pressure campaign over Tehran’s energy trade.

The companies named are Hengli Petrochemical (Dalian) Refining Co., Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical and Shandong Shengxing Chemical.

In its statement, the ministry said the U.S. measures violate international law and basic norms of international relations. The move signals Beijing will not cooperate with the sanctions inside China.

The dispute follows a series of U.S. actions in late April. On April 24, the Treasury Department sanctioned Hengli Petrochemical, saying it had bought billions of dollars in Iranian petroleum. Four days later, Treasury warned financial institutions about sanctions risks linked to China-based independent “teapot” refineries involved in importing Iranian crude.

Reuters reported the Chinese response on May 2, and the commerce ministry statement was later confirmed by official Chinese postings.

The development adds another layer to the long-running U.S.-China clash over energy trade and enforcement. For the five refiners named by Beijing, the immediate practical effect is that Chinese authorities are signaling the U.S. sanctions will not be carried out domestically, even as Washington continues to target entities tied to Iran’s oil exports.