China’s sanctions pushback marks a new phase in the oil war with Washington

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Years of quiet adaptation are giving way to a more explicit and structured confrontation

On May 2, the Ministry of Commerce of China issued an injunction to block US restrictions against five independent Chinese oil refineries that have been sanctioned for importing Iranian oil and utilizing so-called ‘shadow fleets’.

Here’s why Beijing made this decision and why it could be historically significant.

Think slow, act fast 

China has been inching towards this decision for the past year. The Shouguang Luqing refinery in Shandong province was the first to be added to the sanctions list on March 20, 2025. By October, the US had imposed restrictions on three other ‘teapot’ refineries.

Finally, on April 24, 2026, Hengli Petrochemical (Dalian) Refinery Co., Ltd., fell under sanctions. With a capacity of 400,000 barrels per day, the facility in Dalian exceeds the combined capacity of the four previous refineries. This seems to have been the tipping point, prompting the Chinese government to shift from verbal threats to decisive action.

The legal groundwork has been in place for some time: a local law against foreign sanctions was passed in 2021, but remained largely symbolic due to the absence of implementing regulations. The delay made sense: the law was adopted during US President Donald Trump’s first term. After the thaw in US-China relations under [former US President Joe] Biden, it was put on hold. Ultimately, the directive to activate this law was only signed by Chinese Premier Li Qiang in March 2025. 

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