SINGAPORE, Oct 15 – Trading companies have redirected at least five more crude oil tankers away from a major port in eastern China following U.S. sanctions on an import terminal there, as reported by trading sources and shipping data.
The sanctions have disrupted plans for Chinese refiners to unload their shipments at the Lanshan port, located in Shandong province, a key refining area. This redirection of ships could lead to congestion at alternative ports, especially at Zhoushan, situated further south off the coast of Zhejiang province, where multiple vessels have been rerouted, according to traders involved in the market.
The Rizhao Shihua Crude Oil Terminal in Lanshan, which is partially owned by Sinopec Kantons Holding, a division of Sinopec (China Petroleum and Chemical), was sanctioned last week by the U.S. for accepting Iranian oil aboard sanctioned vessels.
About 20% of Sinopec's crude oil imports go through the Rizhao Shihua terminal, according to industry experts and analysts.
MORE SHIPS HEADING TO ZHOUSHAN
In response to the sanctions, Chinese refiners have started to shift their vessels away from this terminal. Unipec, the trading branch of Sinopec and the largest refiner in Asia, diverted the Very Large Crude Carrier (VLCC) New Vista over the weekend to the ports of Ningbo and Zhoushan, where it is currently waiting to unload its cargo.
Unipec has also redirected the VLCC Xin Yue Yang, which is carrying 2 million barrels of Omani crude, to Zhoushan, expected to arrive on October 21, according to data from LSEG and Kpler. Zhoushan, an archipelago south of Shanghai, is connected to Sinopec’s eastern refineries via pipelines.
Additionally, two other vessels, the VLCC Spherical and the Suezmax Fulger, both capable of hauling up to 1 million barrels of oil, are also on their way to Zhoushan, data revealed.
It is uncertain whether the Spherical, carrying 2 million barrels of Brazilian crude, will unload at Zhoushan, as it is still awaiting further instructions, a shipping source mentioned.
TOTALENERGIES DIVERTS TANKER TO TIANJIN
The Fulger, which has about 1 million barrels of Egyptian Arco crude, is scheduled to unload at Zhoushan on October 19. It is not clear which companies chartered the Spherical and Fulger.
The VLCC Habshan, chartered by CSSA, the shipping division of French energy company TotalEnergies, has changed its destination to Tianjin, located north of Rizhao, with an expected arrival on October 26, according to LSEG data. This VLCC is transporting about 2 million barrels of Congolese Djeno crude.
Tianjin is home to Sinopec’s major subsidiary refinery, Tianjin Petrochemical, and also serves as a base for an oil reserve operated by Sinopec.
TotalEnergies and Sinopec did not respond immediately to requests for comments.
On Monday, Sinopec Kantons stated that it anticipates its business will be affected by the sanctions.