Chinese refiner Hengli accused of funding Iran via sanctioned oil

U.S. authorities have accused China’s Hengli Group of facilitating approximately $1 billion in payments to Iran by purchasing sanctioned Iranian oil, according to a report by the Wall Street Journal.

The allegations, outlined in a document reviewed by the publication, claim that Hengli’s transactions circumvented U.S. sanctions enforcement mechanisms by routing payments through intermediary banks and trade structures. The refiner, one of China’s largest private oil processors, has not publicly responded to the accusations.

The alleged scheme involved the purchase of Iranian crude oil, which has been subject to U.S. sanctions since 2018. The payments were reportedly processed through a network of entities designed to obscure the origin of the funds, a tactic often used to evade sanctions compliance. The document cited unnamed sources familiar with the matter.

The accusations come amid heightened scrutiny of Chinese companies’ role in facilitating trade with Iran, a country subject to extensive international sanctions. U.S. officials have previously warned that entities engaging in such transactions risk penalties, including fines and restrictions on access to the U.S. financial system.

Hengli Group, headquartered in Dalian, operates one of China’s largest independent refineries and has been a significant importer of Iranian oil in the past. The company’s activities have drawn attention from regulators in both the U.S. and China, though no formal charges or enforcement actions have been publicly disclosed at this time.

The case underscores the challenges faced by global oil markets in navigating sanctions regimes, particularly as major buyers like China seek to secure discounted crude while avoiding direct violations of U.S. restrictions.