- The ban affects vessels shipping Iranian crude, potentially reducing exports to China.
- Minimal impact as few Venezuelan vessels are on the OFAC sanctions list.
- Russian shipments may continue through non-sanctioned vessels or ports.
A recent ban by Shandong Port Group (SPG) in China’s Shandong Province on vessels listed on the United States OFAC sanctions list could have significant consequences on crude oil imports. SPG controls major ports like Qingdao, Rizhao, and Yantai, through which substantial crude shipments from sanctioned countries, including Iran, Venezuela, and Russia, flow. The ban primarily targets vessels involved in transporting crude from these nations, potentially disrupting the flow of oil into China, particularly Iranian crude, reports Gibson.
Shandong Ports and Crude Import Volume
SPG controls key ports in Shandong Province, including Qingdao, Rizhao, Yantai, Dongying, Binzhou, and Weifang.
These ports together handled 2.4mbd of crude in 2024, out of the province’s total of 3.3mbd. The ban will affect a substantial portion of crude imports.
Sanctioned Vessel Impact
Out of the 2.4mbd of crude imported into SPG ports in 2024, 1.1mbd came from Iran, Venezuela, or Russia.
The OFAC sanctions will most heavily impact Iranian crude, with many vessels shipping Iranian crude now unable to dock at SPG ports.
Venezuelan and Russian Crude
Venezuelan crude flows to SPG ports are less affected, as only a small number of vessels are on the OFAC list.
However, Russian crude flows show a more significant impact, with several vessels now restricted from SPG ports.
Impact of the Ban on the Market
The OFAC sanctions are likely to push the market towards non-sanctioned vessels, possibly leading to a shift in crude supply chains.
This could increase demand for non-sanctioned tankers and reduce dark fleet activity.
Current Trends in Crude Oil Tanker Rates
In the East, VLCC rates improved as charterers began securing cargoes for the end of January.
Aframaxes in the AG region saw some activity but rates remain low. The West Africa VLCC market has strengthened, with owners pushing for better rates.
Suezmax and Aframax Market Movement
Suezmax rates in West Africa have improved, as owners resist lower rates.
Aframax rates in the Mediterranean were volatile, but some recovery was seen towards the end of the week.
US Gulf and Latin America Tanker Market
US Gulf VLCC rates began improving after a slow start, and Aframax rates in the region saw significant increases.
It indicates a strong start to 2025.
North Sea and UK Continent Market Trends
In the North Sea, excess tonnage led to lower rates, but with fewer ships available, there’s hope for a rebound.
The UK Continent MR market showed positive signs with a slight rate increase.
Clean and Dirty Products Market Trends
Clean products saw a positive shift in rates in the East, while the Mediterranean market for Handy vessels was inconsistent, with rates fluctuating due to supply and demand.
MR and Panamax rates remained steady in various regions, with some softness seen in the Med and North.
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Source: Gibsons
