The US Treasury just took a sledgehammer to one of China’s biggest independent oil refiners. On April 24, the Office of Foreign Assets Control (OFAC) sanctioned Hengli Petrochemical (Dalian) Refinery Co., Ltd. for purchasing what it calls “substantial amounts” of Iranian crude oil, a trade allegedly stretching back to at least 2023.
The sanctions didn’t stop at Hengli. Nearly 40 shipping firms and vessels connected to Iran’s shadow oil shipping network were also designated, in what amounts to a broad assault on the clandestine supply chain keeping Iranian petroleum revenue flowing.
What happened and why it matters
Hengli Petrochemical (Dalian) is China’s second-largest “teapot” refinery, an industry term for independent refiners that operate outside of China’s state-owned oil giants. The facility processes roughly 400,000 barrels per day, making it a serious player in Asian energy markets.
According to US officials, Hengli received over five million barrels of Iranian crude delivered by shadow-fleet vessels since 2023. That oil allegedly generated hundreds of millions of dollars for Iran’s Armed Forces General Staff through an entity called Sepehr Energy.
