Following US sanctions on an import terminal in eastern China, trading firms have redirected at least five crude oil tankers from a major port in the region, according to a Reuters report.
US sanctions have forced refiners to alter plans for unloading cargo at Lanshan port in Shandong province, leading to diversions.
This has caused, and may continue to cause, congestion at alternative ports, especially Zhoushan, off the coast of Zhejiang province, where several ships have been redirected, according to market traders.
The US recently sanctioned the Rizhao Shihua Crude Oil Terminal in Lanshan for accepting Iranian oil from sanctioned vessels.
This terminal is jointly owned by Sinopec Kantons Holding, a subsidiary of Sinopec (also known as China Petroleum and Chemical).
Industry executives and analysts told Reuters that the Rizhao Shihua terminal handles one-fifth of Sinopec’s crude oil imports.
Zhoushan may see increased ship traffic
In a direct response to escalating tensions and the evolving geopolitical landscape, Chinese refiners initiated a strategic redeployment of their maritime assets, moving ships away from the affected terminal.
This decisive action underscores a proactive approach to mitigating potential disruptions in the supply chain and ensuring the continuity of their operations.
A prominent example of this shift is Unipec, the formidable trading arm of Sinopec, which holds the prestigious title of Asia’s largest refiner.
Over the past weekend, Unipec made the critical decision to divert the Very Large Crude Carrier (VLCC) “New Vista” from its original trajectory.
The “New Vista” is a colossal vessel, boasting an immense capacity to transport up to 2 million barrels of crude oil, a volume significant enough to meet the energy demands of a small nation for several days.
Instead of proceeding to its initially designated port, the “New Vista” was redirected towards the ports of Ningbo and Zhoushan.
These strategically important port cities, located along China’s eastern coast, offer robust infrastructure and extensive capabilities for handling large-scale oil shipments.
The vessel is currently anchored in these waters, awaiting its turn to discharge its substantial cargo.
The diversion of the “New Vista” is not an isolated incident but rather indicative of a broader, concerted effort by Chinese refiners to adapt to a dynamic and often unpredictable international environment.
Unipec has rerouted the VLCC Xin Yue Yang, which is transporting 2 million barrels of Omani crude, to Zhoushan.
This vessel is expected to arrive on October 21, according to data from LSEG and Kpler. Located south of Shanghai, the Zhoushan archipelago’s terminal is linked by pipelines to Sinopec’s refineries in eastern China.
According to LSEG data, two additional vessels, the VLCC Spherical and the Suezmax Fulger, are also en route to Zhoushan. These vessels have the capacity to transport up to 1 million barrels of oil.
According to the report, the Spherical, laden with 2 million barrels of Brazilian crude, is awaiting instructions regarding its discharge, making its eventual arrival at Zhoushan uncertain.
TotalEnergies diverts tanker
Data indicated that the Fulger, carrying approximately 1 million barrels of Egyptian Arco crude, is scheduled to discharge at Zhoushan on October 19.
The companies that chartered the Spherical and Fulger were not immediately identified.
The VLCC Habshan, chartered by CSSA (TotalEnergies’ shipping arm), is now expected to arrive at Tianjin port on October 26, according to LSEG data. This new destination is located north of Rizhao.
About 2 million barrels of Congolese Djeno crude are being transported by the VLCC, according to data from LSEG and Kpler.
Tianjin serves as a key location for Sinopec, housing its major subsidiary refinery, Tianjin Petrochemical, and an operational oil reserve.
Sinopec Kantons announced on Monday its expectation of the business impact due to the sanctions.
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