Hengli reshapes Singapore unit after US sanctions over Iran oil

Tuesday 28 April 2026 - 14:19

By: Dakir Madiha

Hengli reshapes Singapore unit after US sanctions over Iran oil

The United States Treasury has imposed sanctions on Hengli Petrochemical, one of China’s largest independent oil refiners, accusing the company of purchasing billions of dollars worth of Iranian crude oil. The sanctions also target dozens of shipping companies and vessels allegedly involved in transporting oil linked to Iran through so called shadow fleets.

According to the Office of Foreign Assets Control, the refinery received shipments from sanctioned vessels that collectively transported more than five million barrels of Iranian crude since at least 2023. Washington argues that these transactions generated significant revenue for Iranian military entities and form part of a broader financial network supporting Tehran.

China strongly rejected the sanctions. Foreign Ministry spokesperson Lin Jian stated in Beijing that China opposes unilateral sanctions lacking a basis in international law and criticized what Beijing described as extraterritorial enforcement by the United States. Chinese authorities also pledged to defend the legitimate rights and interests of domestic companies affected by the measures.

Hengli Petrochemical denied all allegations in a filing to the Shanghai Stock Exchange. The company stated that it has never conducted commercial transactions with Iran and that suppliers guarantee its crude oil sources do not violate American sanctions. Hengli added that operations and production remain stable and that it maintains more than three months of crude reserves. The company also plans to pursue legal action seeking removal from the sanctions list.

Following the sanctions announcement, the group rapidly restructured its Singapore based trading subsidiary. Control of Hengli Petrochemical International was transferred to Dalian Changxing International Trade, an entity backed by local government interests. The sanctioned refinery now reportedly retains only a 5 percent stake in the Singapore operation, a move interpreted as an attempt to limit exposure to international financial restrictions.

Financial markets reacted sharply. Shares of Hengli Petrochemical fell to the daily trading limit on Monday as investors assessed the potential impact of the sanctions on the company’s international operations and supply chains.

The measures represent one of the most significant actions taken against a Chinese refiner under the current American pressure campaign targeting Iran’s oil exports. Since early 2025, US authorities have sanctioned more than 1,000 individuals, vessels, and aircraft connected to Iranian energy trade networks. Industry data indicates that China purchased more than 80 percent of Iran’s exported crude last year, much of it reportedly transported through shadow shipping routes and relabeled through intermediary countries.