Investing.com — The U.S. Treasury has accused the refining business of China's Hengli Group of buying billions of dollars in Iranian petroleum, placing it at the centre of Washington's campaign against Tehran's oil exports, the Wall Street Journal reported.
Hengli has denied trading with Iran, saying it complies with regulations in the markets where it operates and that its suppliers provided similar assurances.
Industry analysts, shipping brokers and U.S. officials identify Hengli as a major participant in China's network of independent "teapot" refineries that purchase discounted sanctioned crude.
China bought more than $30 billion of Iranian oil last year, absorbing nearly all Tehran's petroleum exports, according to a March report from the US-China Economic and Security Review Commission.
Independent refiners can buy Iranian crude at discounts of up to 25%, boosting their margins. Unlike China's large state-owned energy companies, many teapots have limited exposure to the U.S. financial system and are less vulnerable to dollar-based sanctions.
Hengli's refinery on Changxing Island is among China's five largest and generates about $30 billion in annual revenue. The broader conglomerate operates across petrochemicals, textiles and shipbuilding.
The Treasury sanctioned Hengli's refining unit in April but did not target its other businesses.
Shipping data reviewed by the Journal indicated that sanctioned tankers delivered more than five million barrels of Iranian crude to Hengli from 2023 onwards.
One vessel, Seeker 8, stopped transmitting its location near Hengli's port for three days in January. When its signal resumed, a sharp change in its draft suggested it had unloaded a large cargo, analysts said.
China's Commerce Ministry instructed companies in May not to comply with the U.S. blacklisting of Hengli and several other refiners.
Beijing opposes unilateral U.S. sanctions and says it will protect China's energy security. Iran's oil exports have since declined under the U.S. naval blockade, though the duration and effectiveness of those restrictions remain uncertain.
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