The United States has imposed sanctions on China's Hengli Petrochemical refinery for purchasing crude oil from Iran. The U.S. Department of the Treasury announced the decision on Friday, stating that the refinery, located near Dalian in northeastern China, is one of the largest buyers of Iranian crude and petroleum products. The Treasury’s Office of Foreign Assets Control also sanctioned about 40 shipping companies and vessels linked to Iran’s so-called shadow fleet.

China has criticized the sanctions as illegal. The Chinese Embassy in Washington said normal trade should not be harmed and urged the U.S. to stop what it called the misuse of sanctions targeting Chinese companies. The move follows earlier U.S. actions last year against several other Chinese chemical and petrochemical firms, including Hebei Xinhai Chemical Group, Shandong Shouguang Luqing Petrochemical, and Shandong Shengjing Chemical.

The sanctions reflect continued U.S. efforts to restrict Iran’s oil trade and pressure entities that facilitate its exports, while drawing renewed diplomatic friction between Washington and Beijing.