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China Directs Firms to Reject US Sanctions on Iranian Oil Trade
(MENAFN) China’s Ministry of Commerce has reportedly instructed domestic companies not to comply with US sanctions targeting certain refineries allegedly connected to Iranian oil exports, according to reports.
The guidance follows recent warnings from the US Treasury, which cautioned financial institutions against engaging with so-called “teapot” refineries—privately owned Chinese facilities that Washington claims are involved in processing a significant share of Iranian oil exports. US officials argue that revenues from these transactions ultimately support Iran’s government and its military programs.
Chinese authorities and state-owned energy firms have repeatedly denied purchasing crude oil directly from Iran. Customs data have also not shown recorded Iranian oil imports since 2023.
Beijing has consistently maintained that unilateral sanctions imposed without approval from the United Nations lack legal basis under international law. According to reports, the Ministry of Commerce stated that such measures interfere with normal commercial activity between Chinese companies and foreign partners and therefore should not be followed, citing national security, sovereignty, and development priorities.
A ministry spokesperson added that the policy would not affect China’s international obligations or its approach to protecting foreign-invested businesses operating within its jurisdiction. The statement also indicated that authorities would continue monitoring what it described as the extraterritorial application of foreign laws and would respond under domestic legal frameworks if necessary.
The announcement comes amid heightened tensions in global energy markets following disruptions linked to conflict in the Middle East. According to reports, oil prices have risen sharply in recent months due to instability in key shipping routes, including the Strait of Hormuz, which is critical for global oil and liquefied natural gas transport.
Despite temporary ceasefire efforts in the region, broader geopolitical disagreements remain unresolved, with ongoing disputes over conditions for a lasting settlement. Energy markets have remained volatile, with prices reaching levels not seen since previous global supply shocks.
The guidance follows recent warnings from the US Treasury, which cautioned financial institutions against engaging with so-called “teapot” refineries—privately owned Chinese facilities that Washington claims are involved in processing a significant share of Iranian oil exports. US officials argue that revenues from these transactions ultimately support Iran’s government and its military programs.
Chinese authorities and state-owned energy firms have repeatedly denied purchasing crude oil directly from Iran. Customs data have also not shown recorded Iranian oil imports since 2023.
Beijing has consistently maintained that unilateral sanctions imposed without approval from the United Nations lack legal basis under international law. According to reports, the Ministry of Commerce stated that such measures interfere with normal commercial activity between Chinese companies and foreign partners and therefore should not be followed, citing national security, sovereignty, and development priorities.
A ministry spokesperson added that the policy would not affect China’s international obligations or its approach to protecting foreign-invested businesses operating within its jurisdiction. The statement also indicated that authorities would continue monitoring what it described as the extraterritorial application of foreign laws and would respond under domestic legal frameworks if necessary.
The announcement comes amid heightened tensions in global energy markets following disruptions linked to conflict in the Middle East. According to reports, oil prices have risen sharply in recent months due to instability in key shipping routes, including the Strait of Hormuz, which is critical for global oil and liquefied natural gas transport.
Despite temporary ceasefire efforts in the region, broader geopolitical disagreements remain unresolved, with ongoing disputes over conditions for a lasting settlement. Energy markets have remained volatile, with prices reaching levels not seen since previous global supply shocks.
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