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China has announced its opposition to US sanctions imposed on the Bank of Kunlun, owned by China National Petroleum Corp, for doing business with Iranian banks.

In a statement on the website of the Chinese consulate in New York on Wednesday, Foreign Ministry spokesman Qin Gang urged the US to immediately revoke the sanctions and stop implementing measures that will hurt China-US relations.

"The Chinese side expresses its strong dissatisfaction and resolute opposition, and will take the matter up with the US in Beijing and Washington."

The US Treasury Department on Tuesday imposed sanctions on the Bank of Kunlun and Elaf Islamic Bank in Iraq "for knowingly facilitating significant transactions or providing significant financial services to Iranian banks designated for their connection to Iran's support for terrorism or proliferation."

The move came on top of new US sanctions imposed by President Barack Obama on Iran, designed to deter Tehran and other countries from establishing payment mechanisms for the purchase of Iranian crude that circumvent existing sanctions.

The Bank of Kunlun is a regional bank in western Xinjiang province. It is 82% held by CNPC while other Xinjiang entities own the remainder.

When contacted Wednesday, a spokesman at CNPC said he was unaware of the matter and declined further comment. There was no response to an email query to the bank sent Wednesday.

In its 2011 annual report, the bank said its overall strategy is to serve China's energy security needs and contribute to the country's western development. Its business is underpinned largely by petroleum in Xinjiang and it serves mainly state-owned and other oil and petrochemical enterprises.

Its cross-border transactions totaled over $60 billion last year.

Qin added in the statement that China and Iran have normal bilateral relations, and have carried out open and transparent business cooperation in energy and trade that had nothing to do with Iran's nuclear program.

Despite receiving an exemption from US sanctions in late June for having significantly reduced its buying from Iran, China's actual imports of Iranian crude oil during the month were near year-ago levels, at over 630,000 b/d, customs data showed July 24.

All of China's crude buying is undertaken by CNPC rival Sinopec, and state trader Zhuhai Zhenrong. CNPC was reported to have pulled out of the $5 billion South Pars project in Iran after dragging its feet on development work despite several ultimatums, the semi-official Mehr news agency said July 29.

"[China's trade with Iran] does not violate any United Nations' Security Council resolutions and other international guidelines. China's position on non-proliferation is consistent and clear and together with relevant parties, including the US, will actively work to promote a resolution to the Iranian nuclear issue," Qin said.

"But the US has ignored China's concerns and has again imposed sanctions on Chinese businesses and banks. This will negatively impact US-China bilateral cooperation," the statement added.