Trading firms have diverted at least five more crude oil tankers from a major port in eastern China after the U.S. imposed sanctions on an import terminal there, according to trading sources and shipping data.
The U.S. sanctions have disrupted plans for the country’s refiners to unload their cargoes at the port of Lanshan in the refining hub of Shandong province. Diverting the ships may also cause congestion at the alternative ports, particularly at Zhoushan, located further south off the coast of Zhejiang province, where several ships have been redirected, multiple traders who participate in the market said.
The Rizhao Shihua Crude Oil Terminal in Lanshan, half-owned by Sinopec Kantons Holding 0934.HK, a unit of Sinopec, also known as China Petroleum and Chemical 600028.SS, was sanctioned last week by the U.S. for receiving Iranian oil on board sanctioned vessels.
One-fifth of Sinopec’s crude oil imports pass through the Rizhao Shihua terminal, according to industry executives and analysts.
MORE SHIPS TO HEAD TO ZHOUSHAN
In response, Chinese refiners began moving their ships away from the terminal. Unipec, the trading arm of Sinopec, Asia’s largest refiner, over the weekend diverted the Very Large Crude Carrier New Vista, capable of carrying up to 2 million barrels of oil, to the ports of Ningbo and Zhoushan, where it is currently waiting to discharge its cargo.
Unipec has also diverted the VLCC Xin Yue Yang, carrying 2 million barrels of Omani crude, to Zhoushan, for arrival on October 21, data from LSEG and Kpler showed. Zhoushan is an archipelago south of Shanghai and the terminal there is connected to Sinopec’s eastern Chinese refineries via pipelines.
Another two vessels, the VLCC Spherical and the Suezmax Fulger, which can carry up to 1 million barrels of oil, are also heading to Zhoushan, LSEG data showed.
It’s unclear if the Spherical, which is carrying 2 million barrels of Brazilian crude, will eventually discharge at Zhoushan as it is still waiting for instructions, a shipping source said.
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The Fulger, carrying about 1 million barrels of Egyptian Arco crude, is due to discharge at Zhoushan on October 19, the data showed. It was not immediately clear which companies chartered the Spherical and Fulger.
The VLCC Habshan, chartered by CSSA, the shipping arm of French energy major TotalEnergies TTEF.PA, has switched its destination to the port of Tianjin, north of Rizhao, for arrival on October 26, LSEG data showed.
The VLCC is carrying about 2 million barrels of Congolese Djeno crude, data from LSEG and Kpler showed.
Tianjin is the site of Sinopec’s major subsidiary refinery Tianjin Petrochemical as well as a base for an oil reserve Sinopec operates.
Sinopec Kantons said on Monday that it expects its business will be impacted by the sanctions.