US says Chinese refinery Hengli bankrolling Iran with sanctioned oil

Hengli Group, a sprawling Chinese petrochemical company led by billionaire Chen Jianhua, has become a major buyer of illicit Iranian crude, the US Treasury says. Washington sanctioned Hengli's refinery business earlier this year, saying it purchased billions of dollars worth of Iranian petroleum. Industry analysts and shipping brokers say the company has been buying sanctioned oil since at least late 2020, and its purchases expanded after Russia's 2022 invasion of Ukraine.

Hengli is one of the largest players among China's 'teapot' refineries that buy Iranian oil at steep discounts, soaking up nearly all of Iran's exported petroleum last year, totalling over $30 billion, according to a March report by the US-China Economic and Security Review Commission. China's Commerce Ministry publicly told companies in May not to comply with US blacklisting of refineries alleged to buy Iranian oil. China's Foreign Ministry has said it firmly opposes what it calls illegal and unreasonable unilateral sanctions.

Hengli has said it complies with regulations and has never engaged in any trade with Iran. Its founder Chen Jianhua, a school dropout who built a small textile factory into China's third-largest private company, is now worth an estimated $20 billion. The US has imposed naval blockades of Iranian ports, but it is unclear how long they will remain in place.