TEHRAN – In a stunning diplomatic escalation days before a planned visit by Donald Trump, China has officially nullified American sanctions against buyers of Iranian crude oil, declaring that Washington's unilateral measures hold "no enforcement value" on Chinese soil.

The Chinese Ministry of Commerce issued an official decree on Saturday blocking US sanctions against five private oil refineries known as "Teapots," including Hengli Petrochemical and four other units in Shandong Province. Washington had accused these refineries of purchasing Iranian crude in violation of US sanctions. Beijing, however, described the American penalties as "without legal justification" and prohibited their implementation.

Citing a 2021 law passed by the State Council, China's Ministry of Commerce labeled foreign sanctions "illegitimate and unenforceable," adding that any restrictions on Chinese companies' trade relations with third countries violate international law. In a direct challenge to US pressure, Beijing has also issued a directive stipulating that any cooperation with the US sanctions is prohibited and void.

The decree explicitly states that any identification, enforcement, or compliance with these US sanctions is forbidden on Chinese soil. According to China’s Ministry of Commerce, Washington’s penalties lack United Nations authorization and therefore violate international law and the fundamental principles of international relations. China’s response, described as a justified defensive action, effectively constitutes a legal nullification of such extraterritorial jurisdiction. The United States has long relied on the dominance of the dollar to extend its sanctions, including secondary sanctions that punish third-party entities. Beijing is now resolutely protecting its companies against these pressures. Furthermore, Chinese authorities announced they are preparing a “list of unreliable entities” for foreign firms that harm the legitimate rights of Chinese companies, while emphasizing that this move will not affect China’s adherence to international obligations nor its protection of foreign-invested enterprises’ legal interests.

The move effectively neutralizes US financial influence over one of the most sensitive nodes in the global energy supply chain.

International analysts warn that any attempt to cut Iran’s oil flow to China would trigger an unprecedented global price shock.

Legal analysts note that China's 2021 law, last revised in April, allows Beijing to impose countermeasures including trade restrictions. State-run People's Daily hailed the decision as using "the strength of the rule of law to counteract the US long-arm jurisdiction." The directive places counterparties in a difficult position, risking violations of Chinese law if they comply with foreign sanctions.”