Hengli Petrochemical slides after US sanctions over alleged Iran oil purchases

On April 27, shares in Hengli Petrochemical dropped as much as 10% after the U.S. Treasury Department imposed sanctions on the firm, accusing it of purchasing Iranian crude.

The measures, announced on April 24 under the administration of Donald Trump, target one of China’s largest independent refiners, Caliber.Az reports via British media.

The Treasury said Hengli is among Iran’s biggest customers for crude oil and petroleum products.

Hengli denied the allegations, stating on April 23 that it had no dealings with Iran and would seek to have the sanctions lifted.

Responding to the move, China’s Ministry of Foreign Affairs of the People's Republic of China criticised Washington’s actions. “stop misusing sanctions” and said it would protect the rights of Chinese companies.

The company added that its 400,000-barrel-per-day refinery in Dalian continues to operate normally, with crude inventories sufficient for more than three months of processing.

Looking ahead, Hengli said it would continue procuring crude oil based on both strategic stockpiling needs and market conditions, adding that transactions would be settled in yuan.

The latest action follows a series of U.S. sanctions on Chinese independent refiners, including Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical.

The sanctions freeze any U.S.-based assets of designated firms and bar American entities from conducting business with them, discouraging some refiners from purchasing Iranian oil.

Despite these measures, China accounted for more than 80% of Iran’s oil exports last year, according to data from analytics firm Kpler. Analysts note that independent refiners often remain less exposed to U.S. restrictions due to their limited reliance on the American financial system.

By Aghakazim Guliyev