US targets another Chinese refinery and VLCCs amid resilient Iranian oil flows

While international media report renewed interest in nuclear talks between the US and Iran – potentially resuming this weekend in the capital of Oman – Washington continues to intensify its ’maximum pressure’ campaign.

In a statement issued on 8 May, the US Treasury designated Hebei Xinhai Chemical Group Co Ltd, an independent refinery in Hebei Province, along with three port terminal operators in Shandong Province, for “purchasing or facilitating the delivery of hundreds of millions of dollars’ worth of Iranian oil”.

According to the Treasury, Hebei Xinhai has received multiple shipments of Iranian oil from ’shadow fleet’ tankers, some of which have been sanctioned for their role transporting Iranian petroleum. This marks the third Chinese refinery sanctioned for such activity in recent months, following two others designated in March and April.

In addition, three companies operating a terminal at Dongying Port were blacklisted for “receiving Iranian oil shipments from shadow fleet vessels since 2024”.

Iranian crude flows remain resilient

Signal Ocean market analyst Maria Bertzeletou noted in a recent report that US measures targeting Chinese independent refiners "have disrupted operations and deterred other refiners from similar purchases”.

However, Iranian crude exports to China remain resilient. Data from Vortexa shows Chinese imports of Iranian oil averaged 1.5M b/d in April, down from March’s record high of 1.8M b/d, yet still above the 2024 average of 1.4M b/d. Notably, Shandong Province alone absorbed over 1.5M b/d in March, marking a nearly 50% increase from the 2024 average.

Kpler expects Iranian flows to remain resilient, hovering between 1.0–1.2M b/d, unless the US begins targeting large Chinese refining complexes or major port hubs.

Market sources told Riviera that while the US administration’s measures are significant, they have yet to deliver the intended impact. Notably, with Washington now moving to impose fees on Chinese-owned and -built tonnage, tanker operators backed by Chinese financing or operating Chinese-built vessels may increasingly avoid US-linked trades altogether. Instead, they are exploring alternative routes and markets, such as Brazil, West Africa, Guyana, Venezuela and Iran.

With global trade becoming increasingly fragmented, shipping insiders noted China, Iran and Russia have continued to deepen their maritime and geopolitical alliances. This suggests current sanctions cannot easily disrupt these ties.