Trading firms have diverted at least five more crude oil tankers from a major port in eastern China after the US imposed sanctions on an import terminal there on Friday, according to trading sources and shipping data.
The US 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 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, a unit of Sinopec, also known as China Petroleum and Chemical, was sanctioned on Thursday by the US 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.
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 VLCC New Vista, capable of carrying up to two 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 two 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 one million barrels of oil, are also heading to Zhoushan, LSEG data showed.
It is unclear if the Spherical, which is carrying two million barrels of Brazilian crude, will eventually discharge at Zhoushan as it is still waiting for instructions, a shipping source said.
The Fulger, carrying about one 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, 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 two 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.
TotalEnergies and Sinopec did not immediately respond to requests for comment.
Sinopec Kantons said on Monday that it expects its business will be impacted by the sanctions.
(Reporting by Florence Tan; additional reporting by Chen Aizhu and Trixie Yap; Editing by Christian Schmollinger)
