China Blocks US Sanctions on Five Teapot Refineries
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- China issued a prohibition order on Saturday, declaring US sanctions on five refineries “invalid” under international law.
- United States Treasury announced sanctions on April 24, targeting Hengli Petrochemical and four other “teapot” refineries for buying Iranian oil.
- Hengli Petrochemical was labeled “one of Tehran’s most valued customers,” allegedly generating hundreds of millions of dollars for the Iranian military.
- Kpler data shows China purchased over 80% of Iran’s oil shipments in 2025, with “teapot” refineries accounting for a quarter of Chinese refining capacity.
- Teapot refineries operate on narrow or negative margins, now face extra hurdles selling products under correct place‑of‑origin markings due to the sanctions.
Why it matters: China’s refineries keep billions of dollars of Iranian oil flowing, so the block protects Chinese energy security but costs US firms access to Chinese markets; the sanctions also force refiners to re‑label products, complicating compliance and raising trade friction.
