The Treasury Department announced April 24 secondary sanctions against Hengli Petrochemical, a private Chinese oil refinery at the port of Dalian with daily processing capacity of about 400,000 barrels. Treasury also sanctioned approximately 40 shipping companies and vessels tied to Iran’s oil trade. The same day, Treasury sanctioned Iran-linked cryptocurrency wallets, freezing $344 million in digital assets.
Treasury calls the sanctions campaign “Economic Fury,” parallel to the Pentagon’s “Operation Epic Fury” name for the war itself.
Hengli denied the charge April 26, saying it “has never engaged in any trade with Iran.” The company said its crude suppliers had guaranteed the origins of the oil and that its procurement operations had not been affected.
The action came just weeks before U.S. President Donald Trump was scheduled to meet Chinese President Xi Jinping in China.
The sanctions extend the Iran blockade into an attack on China’s access to Iranian crude. China is the largest buyer of Iranian oil. Iranian crude accounts for more than 10% of China’s seaborne crude imports.
U.S. forces seized the Tifani, a 2-million-barrel-capacity tanker that had loaded Iranian crude at Kharg Island on April 5. It was intercepted south of the Bay of Bengal, on a route tied to the trade that moves sanctioned Iranian oil toward Asian and Chinese buyers.
Argus Media, a London-based energy and commodity market intelligence firm, reported that the Tifani was probably headed toward Malaysian waters, a regular staging area for ship-to-ship transfers of sanctioned crude. The tanker had discharged at two Chinese ports last year. Two other Iranian ships were seized in the Indian Ocean during the same period.
At a Pentagon briefing April 24, Defense Secretary Pete Hegseth told reporters that “our blockade is growing and going global” and that “no one sails from the Strait of Hormuz to anywhere in the world without the permission of the United States Navy.” Hegseth said 34 ships had been turned back since the blockade began in April.
Gen. Dan Caine, chair of the Joint Chiefs of Staff, said U.S. Central Command was enforcing the blockade against ships of any nationality moving to or from Iranian ports. Hegseth added that the Navy would use “up to and including lethal force if necessary.” Caine said U.S. forces were “postured and prepared to recommence major combat operations on the order of the president.”
A spokesperson for the Chinese embassy in Washington said the sanctions “undermine international trade order and rules” and “infringe upon the legitimate rights and interests of Chinese companies and individuals.”
The aircraft carrier USS George H.W. Bush entered the war zone April 24 with three guided-missile destroyers and 5,000 sailors. It is the third carrier the Trump administration has moved into West Asia. The three strike groups together hold more than 200 combat aircraft and 15,000 sailors and Marines. Another 4,200 Marines will arrive with the Boxer Amphibious Ready Group before April 30. The Financial Times reported the deployment is the largest U.S. naval buildup in West Asia since the 2003 invasion of Iraq.
Washington is using the Iran war to hit China without declaring an open economic war on China. Cutting Iranian crude from Chinese refineries puts pressure on Beijing’s energy security while stopping short of sanctions on the Chinese state or its major state-owned oil companies.
Washington has reason to stop short. A full embargo on China would shake the U.S. financial system itself. China holds hundreds of billions of dollars in U.S. Treasury debt. U.S. corporations depend on Chinese supply chains. Washington is attacking Iran’s exports to do part of the same work indirectly.
That is the contradiction of U.S. monopoly capital. It depends on China as creditor, supplier and market, while the U.S. state treats China as the main obstacle to continued U.S. domination.
The issue is not only the oil itself. It is who controls the routes, payments, tankers and refineries that move that oil into the world market — and who can be cut off when Washington gives the order.
Treasury described Hengli as China’s second-largest independent “teapot” refinery, part of the refining sector that buys much of Iran’s crude.
That is why Treasury chose Hengli. It sanctioned a private refinery, not Sinopec or PetroChina. Targeting one of China’s state-owned oil giants would force Beijing into open response. Targeting Hengli lets Washington claim escalation while leaving room for China to absorb the hit and continue purchases through other channels.
Sanctions experts cited by Reuters said teapot refineries such as Hengli are partly insulated from U.S. measures because they have little exposure to the U.S. financial system. Sanctioning the Chinese banks that handle the payments would have a greater effect on Iranian oil sales.
Washington is moving on two fronts. It is trying to cut the oil flows China needs while keeping Asian reserves, Gulf oil wealth and Chinese trade surpluses tied to the dollar system. The Trump-Xi meeting will proceed under those conditions.
Bessent’s separate April 24 defense of permanent dollar swap-line talks with Gulf and Asian governments fits the same approach. A swap line gives selected central banks access to dollars in a crisis, helping them avoid forced sales of U.S. assets or a turn toward rival payment systems.
Nine days earlier, Treasury had sent letters to financial institutions in China, Hong Kong, the UAE and Oman threatening secondary sanctions for Iran-related transactions. The same Treasury Department that is now offering the UAE permanent dollar swap lines threatened UAE banks over Iran on April 15.
Washington is using sanctions and naval power to decide which oil can move and which refineries can buy. It is using Treasury credit to keep Gulf and Asian governments from moving their dollar reserves outside U.S. control. The order is the same on both fronts: buy the oil Washington permits, hold the dollars Washington needs and do not build trade routes outside U.S. command.
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