China Instructs Domestic Refineries to Disregard US Sanctions

(SeaPRwire) –   Washington has previously cautioned financial institutions against engaging with entities suspected of participating in Iran’s petroleum trade.

The Chinese Ministry of Commerce has directed local enterprises to disregard US sanctions aimed at refineries purportedly connected to Iranian oil commerce.

Toward the end of last month, the US Treasury cautioned banks against conducting business with private “teapot” refineries, asserting that these facilities are responsible for the bulk of China’s Iranian oil acquisitions. The Treasury stated in its advisory that such proceeds ultimately support the Iranian government, its military, and its weapons development initiatives.

While Chinese customs records show no imports from Iran since 2023, the Chinese government and primary state-run corporations maintain that they do not directly purchase Iranian crude.

Beijing maintains that sanctions enacted without United Nations authorization violate international law. In a Saturday announcement, the Chinese Ministry of Commerce declared that these restrictions disrupt standard trade relations between Chinese entities and external parties. Citing “national sovereignty, security and development interests,” the ministry prohibited adherence to the sanctions. A government representative noted that this directive would not compromise China’s international commitments or its safeguarding of foreign-invested enterprises.

“The ministry will maintain vigilant oversight regarding the inappropriate extraterritorial enforcement of foreign laws and regulations, and will take further legal action should such circumstances occur,” the spokesperson stated.

Global oil prices have climbed following the US-Israeli strike on Iran in late February, which led to the shutdown of the Strait of Hormuz—a vital maritime passage responsible for roughly 20% of the world’s oil and LNG transit. Although Iran has restricted the waterway to “hostile vessels,” the US Navy continues to enforce a blockade on Iranian ports within the Persian Gulf.

Even with a ceasefire announced nearly four weeks ago, the outlook for a lasting peace agreement remains unclear, as both parties have criticized the other’s conditions as unreasonable. Oil prices climbed above $120 per barrel this week, marking their highest level since 2022. The conflict has also driven US President Donald Trump’s approval ratings to historic lows and widened the divide between his administration and European allies, who have declined to support military actions against Iran.