China told its independent refineries to disregard U.S. sanctions over their purchases of Iranian crude.
The United States on Monday urged China to push Iran to open the Strait of Hormuz and said that its purchases of Iranian oil amounted to funding global terrorism, delivering a stern rebuke ahead of President Trump’s meeting in Beijing this month with the Chinese leader, Xi Jinping.
The warning came from Treasury Secretary Scott Bessent, who will be participating in the high-stakes meetings. Mr. Bessent has been leading an aggressive campaign to cripple Iran’s economy with a blitz of new sanctions. He has also been working to devise ways to increase oil supplies around the world to blunt the impact of soaring energy prices. Gasoline hit an average of $4.45 per gallon on Monday.
“Let’s see if China — let’s see them step up with some diplomacy and get the Iranians to open the strait,” Mr. Bessent said on Fox News on Monday. “Iran is the largest state sponsor of terrorism, and China has been buying 90 percent of their energy, so they are funding the largest state sponsor of terrorism.”
Tension between the United States and China has eased since a year ago, when the Trump administration triggered a trade war by hiking tariffs on Chinese imports and China retaliated with export controls on critical minerals. But the Iran war has opened a new front in their rivalry, as Chinese purchases of Iranian oil keep Iran’s economy afloat.
In recent weeks, the Treasury Department has intensified economic pressure on China. It has specifically been targeting China’s independent “teapot” refineries with sanctions and warning financial institutions that they will face penalties for facilitating oil sales between Iran and China.
The Treasury Department on April 24 imposed sanctions on an independent Chinese refinery, Hengli Petrochemical Refinery, which is one of Iran’s largest customers for crude oil and other petroleum products. Hengli has purchased billions of dollars’ worth of Iranian crude from the Revolutionary Guards Corps, which wields military, political and economic clout throughout Iran.