Washington imposes sanctions on Chinese refinery for processing Iranian oil

The United States has sanctioned Shandong Shengxing Chemical Co., accused of purchasing Iranian oil. This move is part of the "maximum pressure" strategy against Iran, aimed at limiting its oil exports.

Share:

On April 16, 2025, US authorities announced sanctions against Shandong Shengxing Chemical Co., an independent refinery in China, accused of illegally processing Iranian oil. According to the US State Department, the company is said to have purchased over $1 billion worth of oil from Iran, violating restrictions placed to curb Iranian exports.

This new crackdown on Iran’s activities is part of the “maximum pressure” strategy initiated under the administration of Donald Trump to counter the destabilising activities of the Iranian regime. Washington clarified that these sanctions aim to block access to the international financial system for any company involved in importing Iranian oil, particularly to China, Iran’s largest trading partner.

In parallel, several other companies and vessels, considered part of Iran’s “ghost fleet”, have also been sanctioned. These entities are believed to be responsible for illegal shipments of Iranian oil to China. State Department spokeswoman Tammy Bruce stated that the United States will continue holding both Iran and its partners accountable for their actions related to the sale of oil.

This marks the second time that US authorities have targeted an independent Chinese refinery. In 2022, another refinery, Luqing Petrochemical, was similarly sanctioned. This policy provoked a strong response from Beijing, which accuses the United States of seeking to disrupt trade relations between China and Iran.

The situation remains tense, especially as the International Atomic Energy Agency (IAEA) recently warned that Iran is close to acquiring nuclear military capabilities. With discussions scheduled between Iranian and international authorities in Tehran, the United States seems determined to maintain its economic pressure on the country.

Sanctions on the Iranian energy sector

The US sanctions have direct consequences on the Iranian energy sector, notably disrupting financial transactions and oil supply chains. The goal of the United States is to reduce Iran’s revenue, which funds its military and diplomatic activities. By targeting Chinese refineries involved in processing Iranian oil, Washington hopes to prevent China from becoming a major entry point for these illegal exports.

International reactions and diplomatic tensions

The US sanctions quickly sparked a strong reaction from Beijing. China expressed its displeasure, denouncing the US attempts to interfere in its economic and commercial affairs. The Chinese government clarified that it would continue its trade relations with Iran despite international pressures. This situation could escalate diplomatic tensions between the two countries, especially in the context of growing geopolitical rivalry.

The expansion of the global oil and gas fishing market is accelerating on the back of offshore projects, with annual growth estimated at 5.7% according to The Insight Partners.
The Competition Bureau has required Schlumberger to divest major assets to finalise the acquisition of ChampionX, thereby reducing the risks of market concentration in Canada’s oilfield services sector. —
Saturn Oil & Gas Inc. confirms the acquisition of 1,608,182 common shares for a total amount of USD3.46mn, as part of its public buyback offer in Canada, resulting in a reduction of its free float.
OPEC slightly adjusts its production forecasts for 2025-2026 while projecting stable global demand growth, leaving OPEC+ significant room to increase supply without destabilizing global oil markets.
Talks between European Union member states stall on the adoption of the eighteenth sanctions package targeting Russian oil, due to ongoing disagreements over the proposed price ceiling.
Three new oil fields in Iraqi Kurdistan have been targeted by explosive drones, bringing the number of affected sites in this strategic region to five in one week, according to local authorities.
An explosion at 07:00 at an HKN Energy facility forced ShaMaran Petroleum to shut the Sarsang field while an inquiry determines damage and the impact on regional exports.
The Canadian producer issues USD 237 mn in senior notes at 6.875 % to repay bank debt, repurchase USD 73 mn of 2027 notes and push most of its maturity schedule to 2030.
BP revised upwards its production forecast for the second quarter of 2025, citing stronger-than-expected results from its US shale unit. However, lower oil prices and refinery maintenance shutdowns weighed on overall results.
Belgrade is engaged in complex negotiations with Washington to obtain a fifth extension of sanctions relief for the Serbian oil company NIS, which is majority-owned by Russian groups.
European Union ambassadors are close to reaching an agreement on a new sanctions package aimed at reducing the Russian oil price cap, with measures impacting several energy and financial sectors.
Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.