The Longkou port in China’s Shandong province has discharged Russian crude oil from a sanctioned ship, despite the Shandong Port Group previously announcing a blacklist for carriers under US sanctions, reports S&P Global.
Sanctioned Vessels
Four sanctioned Aframax tankers, carrying 2.73 million barrels of Russian crude oil, were awaiting docking permission in Shandong waters. In contrast, three sanctioned VLCCs have reportedly rerouted to avoid the port group’s blacklist.
The Panama-flagged tank carrying 755,000 barrels of ESPO crude, was recently unloaded at Longkou port. This cargo was loaded before the January 10th sanctions and therefore granted an exemption.
The US Treasury Department issued a statement authorizing limited safety and environmental transactions and the unloading of cargo before January 10th for vessels blocked on that date. This exemption allowed the vessel to unload its cargo.
CAS data indicates that the vessel departed from Kozmino on January 5th, highlighting the challenges and complexities faced by vessels navigating the evolving sanctions landscape.
The sanctions have had a significant impact on freight rates. Aframax freight rates for shipping ESPO blend crude from Kozmino to North China have skyrocketed from $1.625 million to $6.25 million, representing a staggering 284.62% increase, since the sanctions were imposed.
Independent refiners in China, heavily reliant on sanctioned crudes, are facing significant challenges due to these sanctions and the port group’s blacklist. These factors have created a volatile market environment with significantly increased freight costs for sanctioned crude oil shipments.
Vessels Docked
Three sanctioned VLCCs carrying Iranian crude oil have been forced to reroute from their original destinations in Shandong.
The Guyana-flagged Nichola, which had been sanctioned since October 11th, circled for 16 days near Dongjiakou port before rerouting to Huizhou in Guangdong province on January 14th.
Similarly, the Cameroon-flagged Oxis, which was sanctioned on January 10th, also rerouted from Shandong and is now likely heading towards Zhoushan in Zhejiang province.The Barbados-flagged Bendigo, sanctioned since October 11th, turned around in the South China Sea on its way to Shandong and is currently anchored near Hainan Island, awaiting further instructions.
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Source: S&P Global
