06 February 2025 Kpler
Just as ports in China’s Shandong province, home to dozens of teapot refiners, are still awaiting clarity on whether they can receive tankers added to the OFAC sanctions list, Iranian oil sellers have already found new hubs to offload their sanctioned cargo—about 1,500 km south of Shandong.
Ever since the state-owned Shandong Port Group, which operates major terminals in Qingdao, Rizhao, Yantai, and Dongying, issued a preemptive ban three weeks ago on receiving US-sanctioned tankers, no vessels listed by OFAC carrying Iranian oil have successfully offloaded at its facilities. While it remains unclear how long the Shandong Port Group will strictly enforce the ban, oil traders have explored a new workaround—adding yet another voyage to an already complex journey.
As of January 27, two Iranian crude carriers, Nichola and Dorena, had docked at Huizhou Port in southern China, with the latter believed to have completed offloading. Neither tanker had previously been seen calling at Huizhou Port as Iranian oil haulers. A market insider told Kpler that all oil storage tanks at Huizhou Port have been rented out by Chinese traders, likely in preparation for receiving more Iranian cargoes from sanctioned tankers. Traders will then hire non-sanctioned tankers to transport Iranian oil to buyers in Shandong, inevitably adding a few dollars to the cost—either absorbed by Iranian sellers or passed on to Shandong buyers.
Similar to Huizhou, ports in China's eastern Zhejiang province appear ready to accept sanctioned vessels rejected by Shandong. At least three tankers, Carnatic, Clio, and Oxis, which had previously signalled their intent to head to Shandong ports have now changed their destination to Ningbo/Zhoushan in Zhejiang. Meanwhile, the VLCC Bendigo changed its destination from Shandong to Hainan in mid-January but remains anchored off the island.
Despite creative approaches to delivering cargoes to China, Iranian crude oil arrivals are estimated to decline by 277 kbd m/m to 1.1 Mbd in January, as the shipping capacity bottleneck caused by the latest round of US sanctions on Iranian oil vessels remains not fully resolved. For the same reason, Iranian oil floating storage has surged to a 27-week high of 20.68 Mbbls, with over 70% anchored in Malaysian and Singaporean waters.
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