US-Sanctioned Oil Tankers Find Havens in Privately-Run Chinese Ports

Key Points:

* Privately-owned terminals in China are receiving US-sanctioned oil tankers.
* These terminals offer alternatives for buyers seeking discounted crude from Russia and Iran.
* The emergence of these private options highlights Beijing's continued tolerance of sanctions circumvention.

Overview:

Private terminals in China have emerged as key recipients of oil tankers sanctioned by the United States. This development suggests that buyers of Russian and Iranian crude in the region are finding ways to avoid the reluctance of larger port operators. Despite increased scrutiny and sanctions from the US, China's purchases of crude from these countries remain significant.

Dongying, Shandong

* Dongying, a major port in Shandong province, has become a key receiving point for sanctioned tankers.
* Shandong Port Group, a state-owned entity, sold at least one terminal to a private entity, known as Baogang International.
* The Si He, a sanctioned tanker, recently discharged over 744,000 barrels of Russian ESPO crude at Dongying.

Yangshan, Shanghai

* An independently-run berth in Yangshan, south of Shanghai, has also emerged as a hotspot for sanctioned tankers.
* At least two sanctioned tankers with over 1.2 million barrels of Russian Sokol oil have called at Yangshan since January 10th.
* The Yuri Senkevich, a sanctioned Sovcomflot ship, discharged nearly 700,000 barrels of Sokol at Yangshan in late January.

Huizhou, Guangdong

* A terminal in Huizhou, in southern Guangdong province, received a shipment of Iranian oil last month.
* The terminal is operated by Huaying Petrochemical, a privately-run storage and terminal operator controlled by Wintime Energy Group Co.

Implications:

* The rise of private terminals allows China to continue purchasing discounted crude from Russia and Iran.
* It shields high-profile logistics names and large refiners from potential sanctions.
* China's continued willingness to take blacklisted vessels indicates the pressure on its private refiners and Beijing's willingness to overlook sanctions circumvention.