The United States has imposed sweeping new sanctions targeting a China-linked oil trade network tied to Iran, focusing on a major refinery and dozens of shipping entities. Announced on Friday, April 25, 2026, the measures aim to disrupt Tehran’s oil revenue streams by penalizing companies involved in transporting and processing Iranian crude, reinforcing Washington’s broader use of secondary sanctions.

Targeting key nodes in Iran’s oil supply chain

Among those sanctioned is Hengli Petrochemical’s large refinery in Dalian, China, which has the capacity to process about 400,000 barrels of crude oil per day. The U.S. Treasury Department said the facility has accepted Iranian crude shipments since 2023, generating substantial revenue that allegedly supports Iran’s military. Officials indicated the action is part of a wider strategy to dismantle networks of vessels, intermediaries, and buyers enabling Iranian oil exports.

Escalating pressure amid geopolitical tensions

The sanctions come just weeks before a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping in China, adding strain to an already complex economic relationship. Earlier in April 2026, U.S. officials issued warnings to financial institutions in China, Hong Kong, the United Arab Emirates, and Oman about potential penalties for facilitating Iranian transactions. Treasury Secretary Scott Bessent said the administration is prepared to apply stringent secondary sanctions to entities involved in such dealings.

Impact on global energy flows and shipping routes

These developments coincide with broader disruptions in global energy markets. Earlier in April 2026, the U.S. implemented a physical blockade of the Strait of Hormuz, a critical passage for oil shipments from the Persian Gulf. The move has contributed to rising oil prices and heightened uncertainty across energy markets, though U.S. authorities have issued limited waivers to ease immediate supply concerns.

China’s response and global compliance concerns

China remains the largest importer of Iranian oil and has consistently opposed U.S. sanctions, arguing they undermine international trade rules. Despite this position, many Chinese firms and banks continue to comply due to their reliance on the U.S.-dominated financial system. Chinese officials have previously criticized such sanctions as disruptive to legitimate economic activity, highlighting ongoing tensions over trade enforcement and global energy flows.