US sanctions China’s second-largest teapot refinery for purchasing Iranian oil

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Friday (24 April) sanctioned China-based independent teapot refinery Hengli Petrochemical (Dalian) Refinery Co Ltd (Hengli).

OFAC said China-based independent teapot refineries continue to play a vital role in sustaining Iran’s oil economy, and Hengli is one of Iran’s largest customers for crude oil and other petroleum products, having purchased billions of dollars’ worth of Iranian petroleum.

“China’s independent oil refineries, colloquially known as ‘teapots’, purchase the majority of Iran’s crude oil, providing a vital source of revenue to the Iranian regime and its armed forces,” it said. 

“Hengli Petrochemical (Dalian) Refinery Co Ltd, China’s second-largest teapot refinery, has emerged as one of Tehran’s most valued customers, purchasing billions of dollars’ worth of its oil products.”

“Since at least 2023, Hengli has received Iranian oil cargoes from a host of sanctioned shadow fleet vessels, including BIG MAG (IMO 9263215), GALE (IMO 9294240), and ARES (IMO 9174397), which alone have delivered over five million barrels of Iranian crude oil.”

OFAC alleged that Hengli has played an outsized role in purchasing crude oil from Iran’s armed forces. 

“Since at least 2023, Hengli has received Iranian crude oil shipments overseen by the oil sales arm of Iran’s Armed Forces General Staff, Sepehr Energy Jahan Nama Pars Company, generating hundreds of millions of dollars in revenue for the Iranian military,” it said. 

Additionally, OFAC is targeting approximately 40 shipping firms and vessels that operate as part of Iran’s shadow fleet, whose transportation of petroleum and petrochemicals provides a financial lifeline to Iran’s unstable regime.

Secretary of the Treasury Scott Bessent, said: “At President Trump’s direction, Treasury will continue to constrict the network of vessels, intermediaries, and buyers Iran relies on to move its oil to global markets. Any person or vessel facilitating these flows—through covert trade and finance—risks exposure to U.S. sanctions.”

The Treasury has previously targeted four teapot refineries as part of Trump’s maximum pressure campaign.

Related: US OFAC sanctions first Chinese teapot refinery and oil tankers over Iranian links

Photo credit: tommao wang on Unsplash
Published: 27 April, 2026