- U.S. Sanctions on Rizhao Terminal Disrupt Sinopec’s Oil Imports.
- Crude Tankers Rerouted to Zhoushan as Lanshan Port Faces Sanctions.
- Sinopec Diverts Oil Cargoes Following U.S. Action on Shandong Terminal.
Trading firms have redirected at least five crude oil tankers away from Lanshan port in eastern China after the U.S. slapped sanctions on an import terminal there, as reported by trading sources and shipping data. These sanctions have thrown a wrench in the plans of Chinese refiners who were set to unload their cargoes at the Rizhao Shihua Crude Oil Terminal in Shandong province. This diversion is likely to create congestion at other ports, especially in Zhoushan, Zhejiang province, where several ships have already been sent, reports Reuters.
Rizhao Terminal Hit by U.S. Sanctions
The Rizhao Shihua terminal, which is partially owned by Sinopec Kantons Holding, a subsidiary of China Petroleum and Chemical Corporation (Sinopec), was sanctioned by the U.S. last week for accepting Iranian oil on vessels that are under sanctions. Industry insiders estimate that about one-fifth of Sinopec’s total crude oil imports flow through this terminal, underscoring just how significant this disruption is.
Chinese Refiners Redirect Tankers to Zhoushan and Ningbo
In light of the situation, Chinese refiners have started to reroute their ships away from Lanshan. Unipec, the trading arm of Sinopec, has redirected the Very Large Crude Carrier (VLCC) New Vista, which can carry up to 2 million barrels, to Ningbo and Zhoushan, where it’s currently waiting to unload. Additionally, Unipec has sent another VLCC, Xin Yue Yang, which is loaded with 2 million barrels of Omani crude, to Zhoushan, with an expected arrival on October 21, according to data from LSEG and Kpler.
Two more vessels, the VLCC Spherical and the Suezmax Fulger, are also making their way to Zhoushan. However, it’s still uncertain whether Spherical, which is carrying 2 million barrels of Brazilian crude, will unload there, as it’s awaiting further instructions.
TotalEnergies Redirects Tanker to Tianjin
The Fulger, which is transporting around 1 million barrels of Arco crude from Egypt, is set to reach Zhoushan on October 19. So far, the charterers for both the Spherical and Fulger remain unidentified. In the meantime, the VLCC Habshan, chartered by CSSA, the shipping division of the French energy giant TotalEnergies, has altered its route to head towards the northern port of Tianjin, with an expected arrival on October 26. This vessel is carrying 2 million barrels of Congolese Djeno crude.
Tianjin is home to Sinopec’s significant refinery, Tianjin Petrochemical, and acts as a hub for one of the company’s oil reserves.
Business Impact Expected
On Monday, Sinopec Kantons announced that it anticipates its operations will be impacted by the newly implemented U.S. sanctions. As of now, neither Sinopec nor TotalEnergies has publicly commented on these changes.
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Source: Reuters
