China issuing a formal injunction declaring US sanctions "shall not be recognized, implemented, or complied with" is the most direct rejection of US secondary sanctions authority Beijing has made on Iran-related enforcement. This isn't quiet evasion through shell companies and shadow fleets, which has been the pattern for two years. It's a published government order naming five sanctioned refineries (Hengli Petrochemical, Shandong Jincheng, Hebei Xinhai, Shouguang Luqing, Shandong Shengxing) and instructing Chinese entities to ignore Treasury designations.
The geopolitical question this raises is whether US secondary sanctions still function as a coercive tool when the largest buyer of the targeted commodity publicly refuses compliance. Treasury's leverage on Iran's oil revenue has always depended on China's tacit cooperation, even reluctant cooperation. A public injunction removes the ambiguity that made enforcement workable.
The timing is also worth noting. Trump is scheduled to meet Xi later this month, and Iran-US negotiations remain stalled with Tehran demanding sanctions relief as a precondition. Beijing publicly hardening its position before the summit signals it isn't planning to trade Iran enforcement for trade concessions.
https://www.reuters.com/business/energy/chinas-commerce-ministry-blocks-us-sanctions-against-five-refineries-2026-05-02/
4 Comments
The U.S. never expects those outside of its financial system reach to comply… the whole point is the majority of the world falls inside of it, and will have no choice if they remain inside of it.
China issuing this does nothing, but make a headline.
“Treasury’s leverage on Iran’s oil revenue has always depended on China’s tacit cooperation, even reluctant cooperation. ”
Absolutely rubbish. If it were true, the blockade wouldn’t be necessary, only the sanctions.
We’ll see if this is just them manufacturing a bargaining chip for the upcoming meeting or if this is a real thing.
The long arms of secondary sanctions is finally getting clipped. The extraterritorialily of sanctions (primarily originating from western alliance) has always been an odious point in international relations, amounting to blackmail of third parties to carry out economic warfare and foreign policy on its behalf against third party national interest.
This injunction doesn’t just challenge US authority, its a shot across the bow on secondary sanctions in general. China’s public rebuke prohibits Chinese companies from complying with US sanctions, and puts a vice on all foreign companies doing business with China. US must respond forcefully, or risk permanent curtailment of its most potent tool of economic coersion.
The choice of Iran is strategic, minimising an unified Western response on the issue. This is nothing short of a declaration of war while US is distracted and isolated.