China’s Ministry of Commerce announced on Saturday, May 2, 2026, that the U.S. sanctions against the five Chinese companies restrict their normal economic and commercial activities with third countries and constitute what Beijing described as the “extraterritorial application” of U.S. law, according to Xinhua.
The companies targeted by the sanctions are Hengli Petrochemical (Dalian), Shandong Shouguang Luqing Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, and Shandong Shengxing Chemical.
The United States has placed the companies under sanctions over what it described as their involvement in oil transactions with Iran, imposing measures including the blocking of assets and a ban on transactions with them.
China’s Ministry of Commerce said the U.S. sanctions violate international law and the norms governing international relations. Beijing stressed that the blocking order was issued under Chinese laws designed to counter the extraterritorial application of foreign laws.
China said the measure is aimed at protecting its sovereignty, security and development interests, as well as the legitimate rights and interests of Chinese companies and citizens.
The decision is significant because China’s independent “teapot” refineries are major buyers of Iranian oil, and the United States has imposed sanctions on a number of these refineries and other entities involved in Iran’s oil trade in recent years.
The latest move by China’s Ministry of Commerce also marks Beijing’s first official use of a “blocking order” to directly counter specific U.S. sanctions targeting Chinese companies linked to trade with Iran. The move could open a new chapter in tensions between Beijing and Washington over the extraterritorial enforcement of U.S. sanctions.
MNA