China-based Hengli Group main importer of sanctioned Iranian crude oil, analysts say - report

Hengli is one of the largest companies in a network of "teapot" refineries in China that purchase sanctioned oil, according to the officials cited by WSJ.

Hengli Group, a Chinese company that employs over 300,000 people and earns over $100 billion per year, is a primary importer of Iranian crude oil, The Wall Street Journal reported on Saturday, citing industry analysts, shipping brokers, and the US Treasury.

Hengli is one of the largest companies in a network of "teapot" refineries in China that purchase sanctioned oil, according to the officials cited by WSJ.

Since 2023, Hengli has received at least five million barrels of Iranian oil from multiple ships sanctioned by the United States, the US Treasury and shipping brokers claimed.

In response, the Treasury sanctioned Hengli's refinery business earlier this year, although China's Commerce Ministry instructed companies not to comply, and China's Foreign Ministry described the sanctions as "illegal and unreasonable unilateral sanctions."

Iran evades US oil sanctions via 'shadow fleet'

Iran has been evading US sanctions and the blockade using a system of ship-to-ship transfers in which sanctioned ships laden with Iranian oil offload their cargo onto another ship in the water before it is sent to China, the WSJ reported in May.

The ships receiving the oil are often part of Iran’s “shadow fleet,” a fleet of old, rusting tankers that obscure their owners and may switch their flags to those of countries with little shipping oversight to conceal their identities. Ships will often turn off their tracking device and may paint over identity numbers.