The Chinese Ministry of Commerce issued a judicial order on May 2 canceling US sanctions imposed on five Chinese oil refineries. The move marks Beijing’s first official use of the 2021 anti-sanctions rules.
The application names are Hengli Petrochemical, Shandong Jincheng, Hebei Xinhai, Shoguang Luqing, and Shandong Shengxing. The Ministry of Commerce of the People’s Republic of China (MOFCOM) said the sanctions violate international law and prevent Chinese companies from complying.
China’s first official use of 2021 anti-sanctions embargo rules sends oil prices above $120
China’s Ministry of Commerce invoked the 2021 Ban Law for the first time, ordering all companies not to acknowledge, implement, or comply with U.S. sanctions under Executive Orders 13902 and 13846.
The measures targeted five small refineries (including Hengli Petrochemical Company) over their dealings in Iranian oil, describing them as illegal, extraterritorial violations that violate international law. (38 words)
Crude oil futures showed a weak reaction because the announcement was made when major markets were closed.
However, spot Brent crude oil rose to above $120 per barrel before profit-taking pulled the price back to $114,159 as of this writing.
Traders had already taken into account continued Chinese demand for Iranian barrels through opaque shipping channels. Local media I mentioned Hengli alone faces accusations of purchasing Iranian crude worth billions of dollars since 2023.
Shadow fleet ships and ship-to-ship transfers helped hide the origins of the goods along the way.
However, the injunction only protects refiners from local compliance pressures. These countries remain exposed to the risks of dollar-denominated transactions through correspondent banking.
Washington warned global banks Last week about dealing Trade associated with Hormuz The flows are linked to teapot strainers.
The overall signal carries weight for cryptocurrencies and risk assets
A The floor for oil prices keeps inflation expectations constant. This tends to delay interest rate cut bets and put pressure on risk assets across the board.
Bitcoin (BTC) has historically seen… Tracked oil shock cyclesWith the turmoil in the Middle East Crypto volatility feed.
At the same time, the system is strengthened Broader topics to reduce dollarization It is traded until 2026. China has paid Yuan settlement and Cryptocurrency bars for cross-border trade.
Iran has separately demanded transit fees denominated in cryptocurrencies from tankers passing through the Strait of Hormuz.
A potential summit between Trump and Xi looms on the diplomatic calendar. Markets will be watching Monday’s open for any sustained reaction.
Traders also want to know whether the US will respond Secondary penalties on banks Handling refinery payments.
The next test is whether other Chinese companies invoke the embargo rules to challenge the US measures.
The alternative scenario sees the regime standing as an isolated signal before high-risk diplomacy resumes.
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