China bans enforcement of U.S. oil sanctions on five firms

China's Ministry of Commerce announced on Saturday, May 2, 2026, that it has issued a blocking order prohibiting the enforcement of U.S. sanctions against five Chinese companies. The move comes in response to U.S. sanctions imposed on these firms over their alleged involvement in oil transactions with Iran.

The targeted companies are Hengli Petrochemical (Dalian), Shandong Shouguang Luqing Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, and Shandong Shengxing Chemical. The United States has placed these companies under sanctions, citing their involvement in oil trade with Iran, and has imposed measures including asset blocking and a ban on transactions with them.

China's Ministry of Commerce stated that the U.S. sanctions restrict the normal economic and commercial activities of these companies with third countries and constitute what Beijing described as the "extraterritorial application" of U.S. law. The ministry emphasized that the sanctions violate international law and the norms governing international relations. Beijing stressed that the blocking order was issued under Chinese laws designed to counter the extraterritorial application of foreign laws.

The Chinese government said the measure is aimed at protecting its sovereignty, security, and development interests, as well as the legitimate rights and interests of Chinese companies and citizens. The decision is significant because China's independent "teapot" refineries are major buyers of Iranian oil, and the United States has imposed sanctions on a number of these refineries and other entities involved in Iran's oil trade in recent years.

The latest move by China's Ministry of Commerce marks Beijing's first official use of a "blocking order" to directly counter specific U.S. sanctions targeting Chinese companies linked to trade with Iran. According to Mehr News Agency, this could open a new chapter in tensions between Beijing and Washington over the extraterritorial enforcement of U.S. sanctions.