Yesterday, the United States announced sanctions against China's Hengli Petrochemical (Dalian) Refining & Chemical, accusing it of purchasing billions of dollars' worth of Iranian oil and involving approximately 40 shipping companies and vessels linked to Iran, directly targeting Iran's so-called "shadow fleet." As a "tea kettle" refinery accounting for about one-quarter of China's domestic refining capacity, Hengli Petrochemical now faces challenges in receiving shipments and reselling crude. China absorbs over 80% of Iran’s exported crude oil, and independent refineries—due to limited ties with the U.S. financial system—may be able to mitigate the impact of these sanctions.

[Witty] Comment: Sanctions escalating—energy competition has entered deeper waters! The sudden naming of Hengli Petrochemical by the U.S., coupled with around 40 associated shipping firms, aims to block Iran’s oil transaction chain. This is not an isolated move but rather a “maximum pressure” strategy ahead of potential renewed talks between the U.S. and Iran—using financial tools to cut off Iran’s vital revenue stream, more direct than military deployments. Looking back at 2025, the U.S. has already sanctioned multiple "tea kettle" refineries such as Hebei Xinhai Chemical and Luqing Petrochemical; now adding Hengli marks a clear intent to break through the survival bottom line of private refineries.

Data tells the real story: China handles over 80% of Iran’s crude exports. "Tea kettle" refineries rely on low-cost Iranian crude to maintain slim profits—sanctions effectively sever their cost advantage. Interestingly, these private refineries have relatively weak connections to the U.S. financial system, so they may not be fully blocked in the short term. But behind this lies a new logic in Sino-U.S. energy rivalry: the U.S. no longer focuses solely on state-owned oil companies, instead shifting toward precise targeting of private entities—to pressure Iran while also testing China’s response.

With global energy markets already under strain, these sanctions risk pushing up oil prices. Whether Iran can sustain export resilience through local currency settlements and its "shadow fleet" will determine the outcome of this contest—energy security is never decided unilaterally.

Original source: toutiao.com/article/1863414096296967/

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