Ban on Entry of US-Sanctioned Oil Tankers to Ports in Shandong Province, China

On Tuesday, January 8, Reuters reported, citing informed trade sources, that the Shandong port group has banned US-sanctioned oil tankers from operating in the ports of this eastern Chinese province. Data from ship tracking company Kepler shows that last year, the ports of this province imported approximately 1.74 million barrels of oil daily from Iran, Russia, and Venezuela, accounting for about 17% of China's oil imports. According to these trade sources, if this ban is enforced, transportation costs for independent refineries in Shandong, the main buyers of discounted sanctioned crude oil from these three countries, will increase. Washington announced additional sanctions last month against companies and shadow fleets trading Iranian oil. Donald Trump, the elected President of the United States, is expected to intensify sanctions against the Islamic Republic of Iran, similar to his first term in office. This ban could reduce oil imports for China, the world's largest oil importer. The Shandong port group's announcement, issued on Monday, January 7, and confirmed by Reuters sources, prohibits the docking, unloading, or servicing of vessels listed by the Office of Foreign Assets Control of the US Treasury Department. The Shandong port group oversees major ports on China's eastern coast, including Qingdao, Rizhao, and Yantai, which are key centers for importing sanctioned oil from Iran, Russia, and Venezuela. In another statement released on Tuesday, the group said it expects this ban to have a limited impact on independent refineries since most sanctioned oil is transported by non-sanctioned tankers. However, Reuters cited trade sources indicating that the shift to using non-sanctioned vessels could increase costs for Shandong refineries, which are already facing many challenges. The price of Iranian crude sold to China reached its highest level in recent years last month, as new US sanctions raised transportation and logistics costs.