LEXINGTON, Ky. — The Trump administration has imposed economic sanctions on a major China-based oil refinery and approximately 40 shipping companies and tankers involved in transporting Iranian oil, according to LEX 18 News.

The sanctions, announced Friday and first reported by The Associated Press, target Hengli Petrochemical's facility in the port city of Dalian, one of China's largest independent refineries with a processing capacity of roughly 400,000 barrels of crude oil per day. The Treasury Department says Hengli has received Iranian crude oil shipments since 2023 and has generated hundreds of millions of dollars in revenue for the Iranian military.

The move fulfills President Trump's threat to impose secondary sanctions on companies and countries conducting business with Iran. The penalties cut off targeted companies from the U.S. financial system and penalize anyone who does business with them, as part of a broader Republican administration campaign to curtail Iran's oil exports, a key revenue source.

Treasury Secretary Scott Bessent said Friday that his agency "will continue to constrict the network of vessels, intermediaries and buyers Iran relies on to move its oil to global markets." Earlier this month, the Treasury Department sent letters to financial institutions in China, Hong Kong, the UAE and Oman threatening secondary sanctions for facilitating Iranian transactions.

The sanctions arrive amid broader U.S. efforts to restrict Iranian oil trade, including a physical blockade imposed this month on the Strait of Hormuz, the crucial Persian Gulf waterway vital to global energy supplies. China is the largest buyer of Iranian oil, historically importing 80% to 90% of Iranian exports through a shadow fleet of vessels that often obscures the crude's origin.

China has disagreed with previous U.S. sanctions, though its major companies and banks typically comply because they rely on the U.S.-dominated financial system. The timing of the sanctions is notable, coming weeks before President Trump and Chinese leader Xi Jinping are scheduled to meet in China. Iran has previously stated that lifting sanctions is a condition for ending ongoing regional conflict.