Bloomberg: China advises banks to halt new loans to five oil firms

China’s financial regulator has recommended that major domestic banks temporarily suspend new lending to five oil refining companies recently sanctioned by the United States over alleged links to Iranian oil, Bloomberg reports.

Sources said China’s National Financial Regulatory Administration (NFRA) verbally asked banks not to open new yuan-denominated credit lines for the companies, while not requiring early repayment of existing loans.

Banks were also instructed to review their business relationships with the affected firms, including Hengli Petrochemical, China’s largest private oil refiner.

Neither Chinese authorities nor Hengli have commented on the matter.

The decision, reportedly taken before May 1, contrasts with a May 2 statement from China’s Ministry of Commerce, which encouraged companies to disregard US sanctions.

The United States has recently imposed restrictions on several Chinese oil processors, accusing them of purchasing billions of dollars’ worth of Iranian crude as part of efforts to curb Tehran’s energy revenues.

By Bakhtiyar Abbasov