## Beijing Reverses Course: Banks Told to Pause Loans to Sanctioned Chinese Refiners After Ordering Companies to Ignore US Sanctions
Chinese authorities appear to have reversed a landmark directive days after instructing domestic banks and companies to defy US sanctions on five refiners linked to Iranian oil trade. Officials have now asked lenders to pause financing for the sanctioned facilities, according to sources familiar with the matter, in a move that has rattled energy markets and raised fresh questions about Beijing's tolerance for secondary sanctions risk.

The initial order, described by analysts as a "watershed moment," deployed for the first time a blocking statute enacted in 2021 designed to shield Chinese firms from foreign legal enforcement. Among the targets was Hengli Petrochemical's Dalian refinery, the most ambitious designation to date in China's refining sector, alongside several privately-owned processors facing US asset freezes and transaction bans. The directive had instructed companies to disregard compliance obligations under American sanctions, effectively daring Washington to escalate enforcement.

The rapid reversal signals mounting pressure on Beijing as US authorities signal willingness to expand enforcement against entities facilitating Iranian crude flows. Chinese state-owned banks, which handle the majority of cross-border energy financing, face potential exposure to secondary sanctions if they maintain ties with designated entities. The turnaround may reflect a calculation that the political cost of confronting Washington over Iranian oil outweighs the strategic benefit of publicly flouting US measures, particularly ahead of anticipated high-level negotiations between the two governments.
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- **Source**: ZeroHedge
- **Sector**: The Network
- **Tags**: US-China tensions, Iran sanctions, Hengli Petrochemical, Chinese refiners, blocking statute
- **Credibility**: unverified
- **Published**: 2026-05-07 16:31:37
- **ID**: 80274
- **URL**: https://whisperx.ai/en/intel/80274