Hengli Petrochemical Faces U.S. Sanctions Over Alleged Iranian Oil Purchases

Hengli Petrochemical's shares dropped by 10% following U.S. sanctions for alleged Iranian oil transactions. Despite Hengli's denial of dealings with Iran, the U.S. named it a major Iranian oil customer. China's Foreign Ministry criticized the sanctions, urging the U.S. to cease misuse. The sanctions impact independent refiners differently due to limited U.S. exposure.

Shares of China's Hengli Petrochemical plummeted by 10% after U.S. authorities imposed sanctions accusing the firm of purchasing Iranian oil. The U.S. Treasury claims Hengli is a significant customer of Iranian crude and petroleum products. However, Hengli has denied any involvement with Iran in a statement issued Sunday.

During a routine press briefing on Monday, China's Ministry of Foreign Affairs condemned the U.S. sanctions, accusing Washington of misusing its authority. The Ministry emphasized its commitment to safeguarding the rights of Chinese businesses. Previously, the U.S. had sanctioned other Chinese refiners like Hebei Xinhai Chemical Group and Shandong Shouguang Luqing Petrochemical.

U.S. sanctions typically block designated entities' U.S. assets and prohibit American entities from conducting business with them. Nonetheless, China's persistent purchase of over 80% of Iran's shipped oil last year indicates that independent refiners, with minimal U.S. financial system involvement, may withstand full sanction impacts.