China's Hengli Denies Iran Oil Trade Links After US Sanctions — OPIS

China's Hengli Petrochemical said it has never engaged in Iran-linked oil trading and will pursue legal avenues to seek the removal of its Dalian refinery from U.S. sanctions, following Washington's crackdown targeting the unit, according to a filing on the Shanghai Stock Exchange on Monday.

Under General License V issued by the U.S. Treasury on Friday, transactions involving Hengli Petrochemical (Dalian) Refinery Co. and any entity in which Hengli Petrochemical holds a stake of 50% or more are permitted solely for wind-down purposes until 12:01 a.m. EDT on May 24, after which they will be prohibited under U.S. sanction rules.

The U.S. has alleged that Hengli Petrochemical is among Iran's largest oil customers, having purchased billions of dollars' worth of Iranian petroleum.

Washington views independent Chinese "teapot" refineries like Hengli's as playing a key role in sustaining Iran's oil exports by absorbing discounted crude, although sources said state-owned refiners have already largely reduced or avoided such purchases.

Hengli Group is a large conglomerate spanning the full production chain of oil refining, petrochemicals, polyester and textiles, and operates the world's largest purified terephthalic acid plants. Its Dalian facility is among China's largest "teapot" refineries, with a reported crude processing capacity of around 400,000 b/d.

The sanctions could add pressure to Asia's already fragile energy market, as geopolitical tensions continue to disrupt feedstock supply from the Middle East, while renewed drone attacks have also slowed shipments from Russia, an alternative source that Asian buyers have recently resorted to.

Hengli Petrochemical said it has sufficient crude oil supply to meet its processing needs for more than three months. It added that it will continue to conduct yuan-settled oil transactions in an effort to ease investors' concerns over the impact of U.S. sanctions.

The company also noted that the sanctions target only its Dalian refinery unit and related subsidiaries, and will not affect its other entities.

The development comes amid renewed U.S.-Iran engagement, with both sides holding a second round of talks following earlier failed negotiations.

Washington previously issued temporary sanction waivers allowing limited Iranian oil transactions, which were not renewed after they expired.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Yiwen Ju, yju@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com

(END) Dow Jones Newswires

April 27, 2026 02:21 ET (06:21 GMT)