US Sanctions Chinese Refinery and Shadow Fleet to Pressure Iran

The United States Department of the Treasury launched a series of financial strikes against Iran's oil economy on April 24 and 25, 2026, as part of a "maximum pressure" campaign titled "Economic Fury." Under the direction of President Donald Trump, the Treasury sanctioned the Hengli Petrochemical (Dalian) Refinery, one of China's largest independent "teapot" refineries, for allegedly purchasing billions of dollars of Iranian petroleum and generating hundreds of millions in revenue for the Iranian military. The Treasury also targeted approximately 40 shipping companies and vessels associated with Iran's "shadow fleet," specifically those transporting crude oil and petrochemicals to markets in China, the United Arab Emirates, and Bangladesh.

Simultaneously, the U.S. froze approximately $344 million in digital assets tied to the Central Bank of Iran with assistance from Tether. Treasury Secretary Scott Bessent announced that the U.S. would not renew sanctions waivers for Iranian and Russian crude oil already loaded on tankers, declaring that a renewal for Iranian oil is "totally off the table."

Hengli Petrochemical denied the allegations, calling them "baseless" and asserting it has never engaged in trade with Iran. The company shifted to yuan-settled transactions to mitigate a 10% drop in share price and reported having sufficient crude inventory for three months. The Government of China condemned the measures as "illicit unilateral sanctions" and an abuse of "long-arm jurisdiction."

These escalations precede a scheduled May meeting between Presidents Donald Trump and Xi Jinping, as well as diplomatic talks in Pakistan between U.S. envoys and Iran to resolve ongoing conflict.