US sanctions China's Hengli Group for Iranian oil purchases, Singapore unit shuts down

Hengli Group, one of China's largest private oil refiners, was sanctioned by the United States in April 2026 for buying Iranian oil, a charge Hengli denied ^{[1, 2]}. The sanctions targeted Hengli Petrochemical, which operates a 400,000 barrel-per-day refinery in Dalian, as well as about 40 shipping firms and vessels involved in the trade ^{[1, 2]}. Hengli is the largest Chinese oil refiner to face US blacklisting to date ^{[1, 2]}.

Founded by husband and wife Chen Jianhua and Fan Hongwei, Hengli rose from a bankrupt textile mill to become a Fortune Global 500 company ^{[1, 2]}. The company did not respond to requests for comment regarding the sanctions ^{[1, 2]}.

The sanctions have had concrete operational impacts. By June 2026, Hengli’s main offshore trading arm based in Singapore, which employs about 100 people, was forced to shut down ^{[1, 2]}. Additionally, China’s Wanhua Chemical suspended a long-term agreement to purchase benzene from Hengli Petrochemical amid the sanctions ^{[1, 2]}.

Beijing invoked a 2021 anti-foreign sanctions law for the first time to defend Hengli against the US measures. Erica Downs, senior research scholar at Columbia University’s Center on Global Energy Policy, said, "Hengli is no teapot refinery. It is a world-class, world-scale plant that is representative of the large integrated refining and petrochemical facilities in which Beijing increasingly wants to consolidate its refining capacity. This is probably why Beijing felt compelled to use its anti-sanctions law for the first time" ^[1].

The US-imposed sanctions came shortly after allegations that Hengli Petrochemical had purchased Iranian oil, violating US restrictions ^{[1, 2]}. Approximately 40 shipping firms and vessels were sanctioned alongside Hengli ^{[1, 2]}.

Hengli’s Singapore trading arm closure in June affected around 100 employees and marked a significant setback for the company’s international trading activities ^{[1, 2]}. Chinese trading and chemical companies have been disrupted, as seen with Wanhua Chemical halting benzene purchases from Hengli ^{[1, 2]}.