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Significant impact from Shandong Port Group sanctioned tanker banSignificant impact from Shandong Port Group sanctioned tanker ban

Shipbrokers Gibsons sees potentially significant repercussions for larger tankers from the ban on sanctioned tonnage by the Chinese port group.

Paul Bartlett, Correspondent

January 13, 2025

2 Min Read
SPG tanker terminal
Credit: Shandong Port Group

Shandong Port Group (SPG) is set to prevent the entry of tankers which appear on the United States’ Office of Foreign Assets Control (OFAC). Broker Gibsons has counted 344 LR2/Aframax tankers, 149 Suezmaxes, and 194 VLCCs trading illicitly. No fewer than 89 of the VLCCs are currently OFAC-sanctioned.

Independent refiners in China’s Shandong Province are the largest receivers of crude oil from Iran, Venezuela, and Russia and although SPG does not control all ports in the region, it does oversee major facilities including Qingdao, Rizhao, Yantai, Dongying, Binzhou, and Weifang. Together, these ports accounted for close to three quarters – 2.4 million barrels a day (mbd) – of crude oil imported into the province last year.

Gibson notes that it is not clear whether all of the terminals in these ports fall under SPG’s remit and are therefore subject to the ban on OFAC tankers. However, it says, given the volume of imports, SPG’s move is likely to have a significant impact.

On Friday OFAC added a further 183 ships, mainly tankers, to the sanctions list.

According to the firm’s analysis, of the 2.4 million bd shipped to these ports last year, 1.1 million bd came from Iran, Venezuela, or Russia. But the broker notes that given attempts to disguise the origin of these cargoes, the actual figure could be higher.

Related:Shandong Port Group bans entry of US-sanctioned vessels

Iranian cargoes are likely to be hit hardest, Gibson suggests, with 67% of tracked tankers shipping cargoes to SPG ports in 2024 appearing on the OFAC list. They include 42 VLCCs, eight Suezmaxes, and one Aframax which will now no longer be able to trade to SPG ports.

For the moment, the impact on Venezuelan oil trade looks much more limited, Gibson says, with just one Aframax tracked last year. Gibson suggests this looks ‘suspiciously low’ and could indicate more sophisticated evasion tactics.

The majority of Russian crude shipped to China last year was imported through non-SPG ports. However, 43 OFAC-listed Aframax and Suezmax units called at SPG ports with crude oil cargoes during 2024. 

The SPG ban could mean that OFAC ships are diverted to non-SPG ports, Gibson suggests. Or they might be ‘swapped’ with ships that are not yet sanctioned by OFAC. A third option could be ship-to-ship transfers at sea, ensuring that the final legs of voyages to China are undertaken by non-sanctioned tankers.

The hope is that the new port ban provides another barrier to trading sanctioned crude and ships, Gibson says, shifting demand from the dark or shadow fleet, to other reputable ships. Although too soon yet to say, it could also mean that crude oil buyers are less willing to buy sanctioned crude due to fear of tougher sanctions from the incoming US Administration.

Related:US sanctions ‘unprecedented number’ of shadow fleet ships

“While it may be difficult to gauge the magnitude of the development, it is hard to see anything but upside for the mainstream tanker market,” the shipbroker concludes.

About the Author

Paul Bartlett

Correspondent

UK-based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.

Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.

In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.

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