US Imposes Fresh Sanctions On Chinese Refinery & 3 Oil Terminal Operators

The United States has imposed new sanctions on a third Chinese independent oil refinery-Hebei Xinhai Chemical Group Co., Ltd- and three oil terminal operators for their involvement in purchasing and delivering Iranian oil worth hundreds of millions of dollars.

The sanctions aim to disrupt Iran’s oil trade and block revenue that it says supports terrorism and destabilising actions in the Middle East.

The Treasury Department stated that the designated companies and individuals had either bought or helped transfer large volumes of Iranian oil to China, violating US sanctions.

The sanctions are being implemented under Executive order 13902, which targets Iran’s petroleum and petrochemical sectors, and Executive Order 1846, which addresses Iranian oil exports more broadly.

The sanctioned Chinese refinery, Hebei Xinhai Chemical Group, is located in Cangzhou and is one of the largest privately owned refineries outside Shandong province.

The facility operates a 120,000 barrel per day (bpd) refinery, which includes a bitumen plant capable of producing 5 million metric tons annually. It also holds a 74,000 bpd crude oil import quota-among the largest for refineries of its scale.

This is the third time the US has sanctioned a Chinese “teapot” refinery-a term used for smaller, independent oil refiners for Iranian oil transactions.

The US Treasury has also sanctioned three Chinese companies operating oil terminals at Dongying Port in Shandong province. These companies-Baogang (Dongying Donggang) Logistics and Warehousing Co, Ltd, Shandong Baogang International Port, Co, Ltd, and Shandong Jingang Port Co, Ltd- were found to have received more than one million barrels of Iranian oil at their port facilities.

In response, China has criticised the US sanctions.

A spokesperson from the Chinese Embassy in Washington said the United States was abusing unilateral sanctions and interfering in legitimate trade. The spokesperson urged the US to stop disrupting normal economic cooperation between China and Iran.

The sanctioned list also includes several companies, oil tankers, and ship captains accused of facilitating Iranian oil shipments as part of Iran’s so-called “shadow fleet”- a covert system used to transport oil in violation of international sanctions.

The companies added to the list include Embrace Que Limited, Hong Kong Prime Trading Co, Ltd, Propitous Forever Trading Co, Ltd, Nissho Lines Incorporated, Star Twinkle Shipping Limited, and Skadi Limited.

The tankers STAR TWINKLE 6, LAMD, SKADI, IMPALAS, BIG MAG, and THANE have also been identified as blocked property, meaning their US based assets will be frozen and American entities will be prohibited from doing business with them.

An analyst from Rapidan Energy Group commented that while these sanctions increase pressure on Chinese importers, they are still limited in scope.

Previous sanctions on two smaller Chinese refiners had already caused disruptions, making it harder for those companies to secure oil and forcing them to stop importing Iranian crude. Some began selling products under different labels to avoid detection.

Sources familiar with the matter said these sanctions are now discouraging even larger independent Chinese refiners from engaging in oil trade with Iran.

Reference: US Department of State

Source: Maritime Shipping News