China has issued a directive ordering domestic companies to ignore U.S. sanctions on Iranian oil, marking a significant escalation in its resistance to American economic policy. This move, utilizing a 2021 "blocking statute," directly challenges the U.S. administration's efforts to cut off Iran's revenue. Chinese refiners, including "teapot" entities, are accused by the U.S. of purchasing Iranian crude, with Treasury Secretary Scott Bessent stating China is financing Iran's activities as the largest state sponsor of terrorism. The situation is expected to be a major point of discussion between Presidents Trump and Xi, while Iranian officials are in Beijing for diplomatic talks. Enforcement of sanctions is complicated by a surge in vessels operating without tracking signals in the Strait of Hormuz.