The U.S. Treasury Department sanctioned China's Hengli Petrochemical's Dalian refinery, accusing it of buying billions of dollars' worth of Iranian oil and thereby helping fund Iran's military, and roughly 40 shipping companies and vessels, according to an April 24 Treasury press release. On April 27, Hengli's shares dropped by the 10% daily limit, its parent company denied trading with Iran and China's foreign ministry accused the United States of "misusing" sanctions and vowed to safeguard the legitimate rights of Chinese companies.

Washington is escalating pressure on Iran's oil revenue and setting expectations for the upcoming Trump-Xi meeting. Hengli is one of China's four "mega" private refiners that together account for around 10% of China's refining capacity.