China's Hengli scraps West African, Mideast oil purchases and cuts output, sources say

Hengli Petrochemical canceled recent purchases of non-Iranian crude after being hit by U.S. sanctions tied to alleged Iranian oil buying. The disruption is forcing further refinery cutbacks as inventories run low, worsening near-term throughput and margin visibility. The development is likely to pressure the company’s refining operations until supply normalizes.

Analysis

Hengli Petrochemical canceled recent purchases of non-Iranian crude after being hit by U.S. sanctions tied to alleged Iranian oil buying. The disruption is forcing further refinery cutbacks as inventories run low, worsening near-term throughput and margin visibility. The development is likely to pressure the company’s refining operations until supply normalizes.