China's Shandong Port, entry point for most sanctioned oil, bans US-designated vessels (updated)

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08/01/2025 02:09

(Repeats story with no changes to text)

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      Ships cannot dock, unload or receive shipping services
    

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      Ban on ports including Qingdao, Rizhao and Yantai
    

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      May slow imports, push up costs for refiners, traders say 
    

  
    By Chen Aizhu, Siyi Liu and Trixie Yap
       SINGAPORE/BEIJING, Jan 7 (Reuters) - Shandong Port Group
has banned U.S.-sanctioned tankers from calling into its ports
in the eastern Chinese province, home to many independent
refiners that are the biggest importers of oil from countries
under U.S. embargo, three traders said.
    The province imported about 1.74 million barrels per day
(bpd) of oil from Iran, Russia and Venezuela last year,
accounting for about 17% of China's imports, ship tracking data
from Kpler showed.
    If enforced, the ban would drive up shipping costs for
independent refiners in Shandong, the main buyers of discounted
sanctioned crude from the three countries, the traders added.
    Last month, Washington imposed further sanctions on
companies and the shadow fleet that deal with Iranian oil.
President-elect Donald Trump, who takes office on Jan. 20, is
expected to tighten sanctions further on Iran, as he did during
his first administration. 
    The ban could slow imports into China, the world's largest
oil importing nation, traders said.
    The Shandong Port notice issued on Monday was obtained from
two of the traders and confirmed by a third. It forbids ports to
dock, unload or provide ship services to vessels on the Office
of Foreign Assets Control list managed by the U.S. Department of
the Treasury.
    Shandong Port oversees major ports on China's east coast
including Qingdao, Rizhao and Yantai, which are major terminals
for importing sanctioned oil. 
    Shandong Port did not respond to calls or an email from
Reuters requesting comment.
    
    SHANDONG PORT SAYS BAN TO HAVE 'LIMITED IMPACT'
    In a second notice on Tuesday, also reviewed by Reuters,
Shandong Port said it expects the shipping ban to have a limited
impact on independent refiners as most of the sanctioned oil is
being carried on non-sanctioned tankers.
    The ban came after sanctioned tanker Eliza II unloaded at
Yantai Port in early January, the notice said.
    In December, eight very large crude carriers, with a
capacity of two million barrels each, discharged mostly Iranian
oil at Shandong, estimates from tanker tracker Vortexa showed.
    The vessels included Phonix, Vigor, Quinn and Divine, which
are all sanctioned by the U.S. Treasury.
    The active shadow fleet transporting Iranian, Russian and
Venezuelan oil is estimated at about 669 tankers, said Michelle
Wiese Bockmann, principal analyst with maritime data group
Lloyd's List Intelligence.
    Of that total, 250-300 tankers were typically involved in
shipping Russian oil, which excluded Iran’s biggest operator
NITC and Russia’s leading tanker group Sovcomflot, she added.
    Between October and December, the U.S. Treasury imposed
sanctions on 35 tankers it said formed part of Iran's "ghost
fleet", outside of vessels operated by NITC. In early 2024,
Washington slapped separate sanctions on Sovcomflot.
    The outgoing Biden administration plans to impose sanctions
on over 100 tankers involved in Russian oil, sources told
Reuters this week.    
    A switch to using non-sanctioned ships could inflate costs
for refiners in Shandong, which have been struggling with poor
margins and sluggish demand, traders said.
    Shares in leading tanker operator Frontline jumped over 9%
on Tuesday after the port ban news with an expected tightening
of tanker availability.
    The U.S. Defense Department said on Monday it added China's
largest shipping company COSCO to a list of companies it said
work with China's military, which could deter use of COSCO's
tankers by charterers and add to tightness of ships for hire,
shipping analysts said on Tuesday.    
    The price of Iranian crude sold to China hit the highest in
years last month as fresh U.S. sanctions tightened shipping
capacity and drove up logistics costs.
    Iranian crude oil floating storage has risen to a 12-month
high of 20 million barrels and the Iranian export fleet is
relatively stretched with a high level of exports per vessel.
This has historically been associated with subsequent declines
in Iran's crude exports, Goldman Sachs analysts said last week.
    The investment bank expects Iran's crude supply to drop by
300,000 bpd to 3.25 million bpd by the second quarter of 2025.
    Prices of Russian oil, which rose to about a two-year high,
could remain supported as the Biden administration plans to
impose more sanctions on Moscow over its war on Ukraine.

 (Reporting by Aizhu Chen, Siyi Liu and Trixie Yap in Singapore;
Colleen Howe in Beijing; Jonathan Saul in London; Writing by
Lewis Jackson and Florence Tan; Editing by Christian
Schmollinger, Ed Osmond, Sharon Singleton and Mark Heinrich)
 ((siyi.liu@thomsonreuters.com; aizhu.chen@thomsonreuters.com))