Trump Administration Sanctions Major Chinese Refinery Hengli Petrochemical in Escalating Campaign Against Iranian Oil Trade

Treasury targets China's 2nd-largest independent refinery and freezes $344M in crypto as Trump's Maximum Pressure on Iran intensifies in 2026.

By: AXL Media

Published: Apr 30, 2026, 5:20 AM EDT

Source: Information for this report was sourced from FDD (Foundation for Defense of Democracies)

Targeting the Pillars of the Oil Trade

The United States Treasury Department has moved to disrupt the financial lifeline of the Islamic Republic by sanctioning Hengli Petrochemical (Dalian) Refinery Co., Ltd. Officials identified the company, which is China’s second-largest independent "teapot" refinery, as a primary purchaser of sanctioned Iranian petroleum. According to Treasury reports, Hengli has facilitated the transfer of billions of dollars to Tehran since at least 2023, often through cargo overseen by the sales arm of Iran’s Armed Forces General Staff. This designation marks a significant escalation in the Trump administration's "Maximum Pressure" campaign, as Hengli is more deeply integrated into the global trade and logistics network than previously targeted refineries.

Temporary Authorizations and Diplomatic Timing

In a strategic administrative move, the Treasury simultaneously issued General License V alongside the sanctions. This authorization provides a one-month window for international firms to conclude or wind down existing transactions with Hengli Petrochemical. Observers note that the expiration of this license is timed to occur after the high-stakes summit between President Donald Trump and Chinese President Xi Jinping in Beijing next month. This buffer allows for diplomatic negotiations while maintaining a credible threat of secondary sanctions against any financial institutions or partners that continue to engage with the refiner beyond the grace period.

Freezing the Digital Shadow Economy

As Iran seeks to bypass traditional banking blockades, the Trump administration has intensified its focus on the regime's use of digital assets. In coordination with Tether, the issuer of the world’s largest dollar-backed stablecoin, the U.S. government successfully identified and froze $344 million in cryptocurrency belonging to the Central Bank of Iran. This action addresses a growing trend where Tehran reportedly traded nearly $7.8 billion in cryptocurrency last year to finance state activities and regional proxies. While recent designations have targeted UK-registered exchanges like Zedcex, officials are reportedly considering further action against Nobitex, Iran’s largest domestic crypto exchange.