China asks banks to pause new loans to US-sanctioned refiners, Bloomberg News reports

China’s financial regulator has advised the country’s largest lenders to temporarily suspend new loans to five refineries recently sanctioned by the US over their ties to Iranian oil, Bloomberg News reported on Wednesday, citing people familiar with the matter.

Reuters could not immediately verify the report.

The National Financial Regulatory Administration (NFRA) has in a verbal guidance asked the banks to refrain from extending new yuan-denominated loans, the report said, but not to call in existing credit.

The banks were told to review their business dealings with companies including China’s largest private refiners Hengli Petrochemical (Dalian) Refinery, according to the sources cited in the report.

The NFRA and Hengli didn’t immediately respond to Reuters request for comment.

The official directive, given before May 1, comes in contrast with a notice from China’s Ministry of Commerce issued on May 2, in which the government asked firms to disregard US sanctions.

The call to dismiss the sanctions marks the first time China had resorted to blocking measures - designed to protect Chinese firms from foreign intervention seen as unwarranted - introduced in 2021.

In April, the US Treasury imposed sanctions on Hengli Petrochemical, accusing it of buying billions of dollars in Iranian oil, in an escalation of Washington’s long-running effort to curb Tehran’s oil revenue.

US Treasury Secretary Scott Bessent said last month the US warned two Chinese lenders that if they are found to be processing transactions with Iran they will be subject to secondary sanctions, without identifying the banks.

The sanctions created some hurdles for the refiners, including difficulties receiving crude and having to sell refined products under different names.

Reuters

 

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓