Beijing has directed domestic firms to disregard U.S. restrictions tied to Iranian oil, as geopolitical tensions continue to drive global energy instability.
By yourNEWS Media Newsroom
China’s Ministry of Commerce has ordered domestic companies not to comply with U.S. sanctions targeting privately owned refineries accused of facilitating Iranian oil trade, marking a direct challenge to Washington’s enforcement measures.
The directive follows a warning issued by the U.S. Treasury late last month cautioning financial institutions against engaging with smaller, independent refiners—often referred to as “teapot” facilities—which U.S. officials say handle a significant share of China’s Iranian oil imports. In its notice, the Treasury stated, “This revenue ultimately benefits the Iranian regime, its weapons programs, and its military.”
Chinese officials and major state-owned enterprises have consistently denied purchasing Iranian crude directly, and official customs records have shown no such imports since 2023. However, Beijing has maintained that unilateral sanctions lacking authorization from the United Nations violate international law.
In a statement released Saturday, China’s Ministry of Commerce said the U.S. restrictions disrupt standard commercial relationships between Chinese firms and external partners. The ministry formally prohibited compliance with the sanctions, citing concerns related to “national sovereignty, security and development interests.”
A government spokesperson said the policy would not alter China’s adherence to its international commitments or its protections for foreign-invested businesses operating within the country.
“The ministry will continue to closely monitor the improper extraterritorial application of foreign laws and measures, and will carry out further work in accordance with the law if such situations arise,” the spokesperson said.
The dispute comes amid heightened volatility in global energy markets following military actions involving the United States and Israel against Iran in late February. The conflict led to the closure of the Strait of Hormuz, a critical passage responsible for approximately 20% of global oil and liquefied natural gas shipments.
Iran has restricted access through the waterway to what it described as “hostile ships,” while U.S. naval forces have enforced a blockade of Iranian ports in the Persian Gulf. Despite a ceasefire announced nearly a month ago, negotiations toward a broader settlement have stalled, with both sides accusing the other of presenting unacceptable terms.
Oil prices have surged in response to the disruption, exceeding $120 per barrel this week for the first time since 2022. The ongoing conflict has also affected domestic political dynamics in the United States, where President Donald Trump has seen declining approval ratings and growing disagreements with European allies, several of whom have declined to support military operations related to Iran.
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