China’s Commerce Ministry blocks US sanctions against five refineries

SHANGHAI, May 2 (Reuters) – China’s Ministry of Commerce said on Saturday it had issued an injunction to block U.S. sanctions imposed on five Chinese refiners accused of buying Iranian oil, according to state news agency Xinhua.

The ministry named these five refineries as the Hengli Petrochemical (Dalian) Refinery and called the Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical and Shandong Shengxing Chemical refineries ‘teapot’.

In April, the US Treasury imposed sanctions on Hengli Petrochemicals, accusing it of buying billions of dollars in Iranian oil, escalating Washington’s long-standing efforts to restrict Tehran’s oil revenue.

The Trump administration last year imposed sanctions on four other refineries named by the department, among others.

The ministry said US sanctions violated “international law and basic norms of international relations”.

As a result, the ministry said it made a precautionary decision.

“The injunction stipulates that the United States may not recognize, enforce or comply with the sanctions imposed on the five Chinese companies mentioned above,” the ministry said.

Sanctions have created some obstacles for refineries, such as difficulties in purchasing crude oil and having to sell refined products under different names. Kettles account for a quarter of China’s refining capacity, operate on tight and sometimes negative margins and have been squeezed recently by sluggish domestic demand.

(Reporting by Engen Tham in Shanghai, Editing by William Maclean)