May 6 (Reuters) – China’s financial regulator has advised the country’s largest banks to temporarily halt new loans to five refineries recently hit by U.S. sanctions over ties to Iranian oil, Bloomberg reported on Wednesday, citing people familiar with the matter.
Reuters could not immediately verify the report.
The National Financial Regulatory Authority (NFRA) has asked banks in verbal guidance not to grant new yuan loans but not to call in existing credit, the report said.
Banks have been told to review business dealings with companies such as Hengli Petrochemical (Dalian) Refinery, China’s largest private refinery, the report said, citing sources.
NFRA and Hengli did not immediately respond to Reuters’ requests for comment.
Official directives issued before May 1 stand in stark contrast to a notice issued by the Chinese Ministry of Commerce on May 2 in which the government asked companies to ignore U.S. sanctions.
The call to lift sanctions marks the first time China has resorted to blockade measures introduced in 2021 to protect Chinese companies from what are seen as unwarranted foreign interference.
In April, the U.S. Treasury Department imposed sanctions on Hengli Petrochemical, accusing it of buying billions of dollars of Iranian oil, an escalation of Washington’s long-running efforts to curb Tehran’s oil revenues.
U.S. Treasury Secretary Scott Bessant said last month that the United States warned two Chinese banks that they would be subject to secondary sanctions if they were found to be processing transactions with Iran, without naming the banks.
The sanctions have created several hurdles for refiners, including difficulties receiving crude oil and having to sell refined products under different names.
(Reporting by Fabiola Arámburo in Mexico City, Selena Li in Hong Kong, Liu Siyi in Singapore and Li Qiaoyi in Beijing; Editing by Jacqueline Wong and Kim Coghill)
