China Banks Halt New Loans to Sanctioned Refineries Amid U.S.-Iran Oil Crackdown

China’s financial regulator has reportedly instructed the country’s biggest banks to temporarily stop issuing new loans to several Chinese refineries sanctioned by the United States over alleged purchases of Iranian oil. According to a Bloomberg News report citing sources familiar with the matter, the National Financial Regulatory Administration (NFRA) verbally advised lenders to suspend new yuan-denominated financing for five affected refiners while continuing support for existing credit arrangements.

Among the companies impacted is 600346, one of China’s largest private refining firms. The move follows U.S. sanctions imposed in April targeting Chinese companies accused of facilitating Iran’s oil exports. Washington claims the refiners purchased billions of dollars worth of Iranian crude, intensifying pressure on Tehran’s energy revenues.

Although Reuters could not independently verify the Bloomberg report, the development highlights growing tension between Beijing and Washington over sanctions enforcement. Sources indicated Chinese banks were also asked to reassess broader business relationships with the sanctioned companies. Neither the NFRA nor Hengli Petrochemical immediately responded to media requests for comment.

The reported lending restrictions appear to contrast sharply with China’s official stance announced earlier this month. On May 2, China’s Ministry of Commerce urged domestic businesses to ignore what it described as unjustified foreign sanctions. The statement marked China’s first formal use of blocking measures introduced in 2021 to shield Chinese firms from overseas legal actions.

U.S. Treasury Secretary Scott Bessent recently warned that Chinese financial institutions processing transactions linked to Iran could face secondary sanctions. While the banks involved were not identified, the warning raised concerns throughout China’s financial sector.

The sanctions have already created operational challenges for refiners, including difficulties importing crude oil and selling refined products under their original brand names.