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Hengli Petrochemical (Dalian) Refinery Co., Ltd. faces US sanctions for purchasing billions in Iranian crude oil since 2023

The US Treasury’s Office of Foreign Assets Control designated Hengli Petrochemical (Dalian) Refinery Co., Ltd. as a primary importer of sanctioned Iranian crude oil. Since 2023, the company has received at least five million barrels of Iranian oil from multiple ships sanctioned by the United States. The US Treasury and shipping brokers claimed that these sales allegedly flowed back to Iran’s Armed Forces General Staff through a sales agent. While Hengli has pushed back against the sanctions, calling them baseless, the company is already adapting by securing West African crude for near-term delivery. This move follows a period where China's independent refiners, known as "teapot" refineries, limited their imports due to high prices and an unofficial policy to reduce consumption. However, current stockpiles in Shandong have dropped to their lowest level in eight months, prompting analysts to expect a return to larger Iranian oil purchases in August. This shift is expected to pressure international oil markets as China resumes its role as a major global importer.

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