U.S. Treasury Secretary Scott Bessent warned Chinese refineries to ignore sanctions over Iranian crude, framing the imports as funding for terrorism. The move comes ahead of President Trump’s Beijing visit, where the Strait of Hormuz’s status will be on the agenda. China already supplies about 90 percent of Iran’s oil, keeping its economy afloat.

Bessent cited the Treasury’s recent crackdown, including sanctions on Hengli Petrochemical Refinery, a major buyer of Iranian crude from the Revolutionary Guards. Beijing responded by ordering firms to defy U.S. rules, citing a 2021 “blocking measure” that shields domestic companies from foreign laws it deems unfair. The clash threatens to deepen financial decoupling between the world’s largest economies.

The dispute arrives as gasoline prices hit an average of $4.45 per gallon, pushing the Treasury to seek alternative supply routes. China’s defiance could trigger broader sanctions, affecting global oil markets and investor confidence. For now, the U.S. and China face a standoff that could reshape trade flows and energy security dynamics.

Analysts warn that a prolonged confrontation could force oil producers to find new buyers or exit markets, while Chinese banks may face restricted access to U.S. financial systems. The outcome of the Trump‑Xi meeting will likely dictate whether sanctions stay in force or are relaxed, directly influencing global oil supply chains and market stability.