Hengli Turns to West African Crude as Sanctions Spur Supply Shift

June 12, 2026

Mintesinot Nigussie

Chinese refining giant Hengli Petrochemical has purchased at least 2 million barrels of West African crude and is seeking additional non-sanctioned supplies as it attempts to reduce dependence on Iranian oil and pursue removal from a United States sanctions list.

The move follows sanctions imposed by Washington in April over allegations that the privately owned refiner purchased Iranian crude. Hengli has denied the claims and said it would seek legal avenues to challenge the designation.

According to Reuters, Hengli has increased enquiries for crude cargoes from West Africa and the Middle East for delivery from June onwards, seeking supplies that are not subject to sanctions. Trade sources said the company has already secured at least 2 million barrels of West African crude scheduled to arrive in China between late June and July.

The shift comes as Chinese independent refiners grapple with tightening supplies of Iranian oil. Industry data showed China's imports of Iranian crude fell to about 1.19 million barrels per day last month, the lowest level since September, amid heightened geopolitical tensions and export restrictions.

For African producers, the development highlights the growing role of the continent's crude exporters in filling supply gaps created by geopolitical disruptions. Crude grades from Nigeria and Angola are often viewed as suitable alternatives for Asian refiners because of their quality and compatibility with existing refining infrastructure.

Hengli operates a 400,000-barrel-per-day refinery in Dalian and had increasingly relied on Iranian and Russian crude since late 2024, according to traders familiar with the company's procurement activities.

Market participants said sourcing crude remains challenging for the refiner despite its efforts to diversify. Many suppliers remain cautious about dealing directly with sanctioned entities because of concerns over potential secondary sanctions, increasing the likelihood that transactions will be routed through intermediaries.

The sanctions have also begun affecting operations. Sources told Reuters that declining crude inventories prompted Hengli to cut refinery utilisation rates to slightly below 70 percent in June from more than 80 percent a month earlier.

Under United States Treasury regulations, sanctioned entities may apply for removal from sanctions lists by demonstrating that the basis for designation no longer applies or was insufficient. Hengli previously said it would continue operating using existing inventories and transactions denominated in Chinese yuan while seeking to challenge the sanctions.