China's Ministry of Commerce blocked U.S. sanctions against five oil refineries on Saturday, May 2, 2026 [1].
The move signals a direct confrontation between the two superpowers over the legality of U.S. unilateral sanctions and the flow of Iranian energy into Asian markets.
The U.S. Treasury Department sanctioned the five firms, often referred to as "teapot" refineries, for purchasing Iranian crude [3]. This action was intended to restrict Iran's ability to fund its government through oil exports. Among the targeted entities is the Hengli Petrochemical Dalian Refinery, which is the second-biggest among these independent refineries [4].
In response, the Ministry of Commerce in Beijing issued an injunction to block the sanctions from being enforced within China [1]. The ministry said that the sanctions against refineries accused of importing Iranian oil violate international law [2].
Chinese officials said the U.S. measures harm Chinese commercial interests [1]. By issuing the injunction, Beijing is attempting to shield its domestic energy sector from the reach of the U.S. financial system and legal penalties.
The U.S. Treasury Department said the refineries were sanctioned specifically for their role in purchasing Iranian crude [3]. The dispute highlights the ongoing tension between U.S. efforts to isolate Iran and China's desire to maintain energy security, and trade autonomy.
“Sanctions against refineries accused of importing Iranian oil violate international law.”
This escalation demonstrates China's increasing willingness to use legal and regulatory tools to neutralize U.S. foreign policy objectives. By formally blocking sanctions, Beijing is not only protecting its independent 'teapot' refineries but is also challenging the global primacy of the U.S. Treasury's enforcement mechanisms regarding Iranian oil exports.
