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Business Times
09-05-2025
- Business
- Business Times
US sanctions on China refiners over Iran oil disrupt operations: sources
[SINGAPORE] Recent US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as US President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to US$2.30 to US$2.40 a barrel against ICE Brent from about US$2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by US-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90 per cent of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. Shipping, sales headaches The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around Apr 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of petrol blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG ship tracking data showed. That contrasts with the first three months of this year when 83,000 metric tonnes (701,000 barrels) of methyl tertiary butyl ether, a key petrol blendstock export, were shipped from Laizhou, accounting for 15 per cent of China's total outflow of the blendstock. State giant China National Offshore Oil Corporation (Cnooc) stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the US sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. Cnooc did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered. REUTERS
Yahoo
08-05-2025
- Business
- Yahoo
Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say
By Siyi Liu, Trixie Yap and Chen Aizhu SINGAPORE (Reuters) -Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. SHIPPING, SALES HEADACHES The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed. That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock. State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. CNOOC did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
Yahoo
08-05-2025
- Business
- Yahoo
Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say
By Siyi Liu, Trixie Yap and Chen Aizhu SINGAPORE (Reuters) -Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. SHIPPING, SALES HEADACHES The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed. That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock. State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. CNOOC did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
Reuters
08-05-2025
- Business
- Reuters
Exclusive: US sanctions on China refiners over Iran oil disrupt operations, sources say
SINGAPORE, May 8 (Reuters) - Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed. That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock. State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. CNOOC did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
Business Times
08-05-2025
- Business
- Business Times
Zombie oil supertanker in China points to Iran trade workarounds
[HONG KONG] After buckling under pressure from Beijing and Washington, the clandestine supply chain that carries Iranian crude to China is finding new workarounds. A tanker identifying itself as Global discharged about two million barrels of Iranian oil at a port managed by a Chinese provincial government in late April, ship-tracking data show. However, the vessel was actually a very large crude carrier called Gather View that had been sanctioned by the US and took over the identity of a previously scrapped ship to evade a crackdown on the trade. It's the first time a so-called zombie ship was observed entering a government-run port in Shandong since the province, home to the world's biggest buyers of Iranian crude, issued a directive forbidding sanctioned tankers in January. The move highlights the lengths Tehran and the teapots – independent Chinese refiners often working on extremely thin margins – are going to keep the trade alive. The sale of Iranian crude to China is crucial to Tehran and a lifeline for Shandong's private processors. In the past, it's been facilitated by ship-to-ship transfers in the waters off Malaysia to avoid scrutiny and mask the origins of the cargoes. A crackdown by the US – through successive rounds of sanctions – and China since January has now snarled the supply chain. Traders have since rushed to find privately run berths in China to receive sensitive cargoes, as well as sourcing the smaller tankers they are able to accept. The delivery of two million barrels on a sanctioned VLCC to a government-run port goes against that trend. It's a risky gambit: if discovered by authorities, the entire cargo worth about $120 million at the time could have been impounded. Furthermore, the port could have hit by Washington's secondary sanctions – as happened in March to a terminal in southern China that facilitated the trade. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Iran needs to be creative because the pace for them to find new tankers cannot really match the pace of US sanctions,' said Muyu Xu, senior crude oil analyst at analytics firm Kpler in Singapore. 'So that's why we're seeing them come up with this tactic.' Zombie ships, where a vessel signals itself as an already scrapped tanker, are increasingly being used to avoid sanctions, as law enforcement officials become more familiar with the usual tactics used by the dark fleet to deliver sensitive cargoes. At least four such vessels have featured in the Venezuelan oil trade, while late last year one was observed discharging at two ports in China. The Gather View – identifying as Global – called at a berth in Dongjiakou belonging to Qingdao Port, which in turn is part of Shandong Port Group, on Apr 25, according to data from Kpler and Bloomberg. It appears to have carried out a similar run in March. Shandong Port Group did not respond to an email seeking comment. There's no clear evidence of willful wrongdoing in port inspection procedures but 'there may be some loophole in terms of scrutiny', said Kpler's Xu. The Gather View was sanctioned by the Treasury Department in December under its former name, MS Angia, for being involved in the Iranian oil trade. It's flying the flag of San Marino, took its cargo from another tanker owned by the National Iranian Oil Company through an at-sea transfer near Malaysia, and has since returned to that area, data show. The original Global – a floating storage unit for crude – was sent to the breakers in Bangladesh in late 2021. That vessel was not sanctioned by any government. Smaller cargoes on sanctioned tankers are still reaching China's private ports, including a terminal at Dongying recently spun off from Shandong Port Group that has become a go-to spot for sensitive shipments. However, those workarounds aren't as cost-efficient as those done through official ports that can receive larger VLCCs. BLOOMBERG
