Shandong Port in China, which served as the main hub for importing sanctioned oil from Iran, Russia, and Venezuela, has banned the entry of oil tankers sanctioned by the United States into its managed ports.
According to Reuters, three traders active in these ports told the news agency that the Shandong Port Group has banned U.S.-sanctioned oil tankers from docking at its ports in eastern China.
Ship tracking data from Kpler shows that this province imported nearly 1.74 million barrels per day of oil from Iran, Russia, and Venezuela last year, accounting for approximately 17% of China’s total oil imports.
According to the report, if this ban is enforced, transportation costs will rise for independent refineries in Shandong, which are the primary buyers of discounted crude oil from these three countries.
Last month, Washington announced additional sanctions against companies and shadow fleets involved in transporting and trading Iranian oil.
Donald Trump, the U.S. president-elect, is expected to intensify sanctions against Iran under his maximum pressure policy, similar to his first term in office.
According to Reuters, enforcing this ban could reduce oil imports to China, the world’s largest oil importer.
Shandong Port Issues Second Directive
In a second directive issued by Shandong Port on Tuesday, January 7, obtained by Reuters, it stated that they expect the announced ban to have a limited impact on independent refineries since most sanctioned oil from these three countries is transported by non-sanctioned tankers.
Estimates from Vortexa, a company that tracks oil tankers, show that in December, eight very large crude carriers (VLCCs), at least four of which are sanctioned by the U.S. Treasury Department, unloaded two million barrels of Iranian oil in Shandong.
Michelle Wiese Bockmann, the lead analyst at Lloyd’s List Intelligence, told Reuters that the estimated number of shadow fleet tankers involved in transporting oil from Iran, Russia, and Venezuela is around 669 vessels.
In October and December, the U.S. Treasury Department imposed sanctions on 35 tankers, which they claim are part of Iran’s ghost fleet.
The price of Iranian crude oil sold to China reached its highest level in recent years last month, as new U.S. sanctions constrained transportation capacity and increased logistics costs.
