China Tightens Financial Tap on Iran Oil Trade Ahead of Trump-Xi Talks

China is quietly pulling back where it matters most: money. Regulators have told the country’s biggest banks to halt new lending to five refiners hit by fresh US sanctions over Iranian oil links, people familiar with the matter said, signaling a cautious financial retreat even as Beijing publicly pushes back against Washington. The directive stops short of a full clampdown (existing loans stay intact), but it draws a clear line around new exposure.

The timing sharpens the stakes. President Donald Trump is set to press Xi Jinping on China’s continued purchases of Iranian oil at their upcoming Beijing meeting, even as US officials warn banks of secondary sanctions risk tied to such trade. Beijing, once again, is walking a tightrope as it projects defiance, invoking its “blocking” rules to counter US measures while simultaneously shielding its banking giants from threats that could jeopardize dollar access.

Meanwhile, Washington may be exploring an off-ramp. The US and Iran are circling a tentative framework that could reopen the Strait of Hormuz and ease port restrictions, a person familiar with the talks said, as Trump looks to cool a conflict that has driven up energy prices and dented his political standing. Nothing is agreed yet, but the contrast is striking as threat of sanctions tighten and diplomacy flickers.