Chinese refining firm criticizes US sanctions

Chinese private refining giant Hengli Group has strongly condemned recent United States sanctions imposed on one of its wholly-owned subsidiaries, dismissing US allegations of ties to Iran as "groundless", and lacking both factual and legal basis.

The US Department of the Treasury's Office of Foreign Assets Control, or OFAC, placed Hengli Petrochemical (Dalian) Refining Co on its Specially Designated Nationals list on Friday.

In a public filing released late on Sunday, Hengli firmly denied the accusations, saying: "The company has strictly complied with laws and regulations since its inception. We have never engaged in any trade with Iran, and our suppliers guarantee that the origin of our crude oil does not fall under US sanctions".

Foreign Ministry spokesman Lin Jian addressed the issue during a regular news briefing on Monday and emphasized that China consistently opposes illegal unilateral sanctions and "long-arm jurisdiction" that lack a basis in international law. He said China urges the US to halt such wrongful practices and noted that Beijing will firmly safeguard the legitimate rights and interests of its enterprises.

Hengli reassured the market that its production and operations remain entirely unaffected. It said all facilities are running at high capacity, and it added that it maintains sufficient crude oil reserves to meet processing demands for more than three months.

To mitigate potential risks associated with restricted US dollar settlements and international shipping insurance, Hengli stated it will continue leveraging renminbi settlements for crude oil procurement.

By combining strategic reserves with market-oriented purchases, the company aims to ensure the security and diversification of its supply chain.

The sanctions are expected to have a limited impact on the wider corporate group because they apply solely to the Dalian refining subsidiary and not to other entities controlled by the listed company. Hengli currently has no subsidiaries, business operations, or assets in the United States, the company added.

The company's financial exposure to overseas markets is minimal. In 2025, approximately 90 percent of its operating revenue and 97 percent of its gross profit were generated within the domestic market.