One of China’s largest port operators has banned U.S-sanctioned Russian oil tankers from docking at its berths in eastern China’s Shandong province, says a report signaling a blow to Vladimir Putin’s sanctions-busting “shadow fleet.”
Three traders were cited by Reuters confirming the ban, enacted by the Chinese state-owned Shandong Port Group, which operates a network of ports in Shandong province. The region’s numerous refiners are major importers of foreign oil.
Newsweek reached out to the Russian Foreign Ministry and Shandong Port Group for comment.
Why It Matters
China, the world’s largest importer of crude oil, sources more of the commodity from Russia than any other country, increasing imports as G7 nations imposed a price cap on Russian crude following Moscow’s February 2022 invasion of Ukraine.
In 2023, Russia accounted for nearly 20 percent of China’s imported crude, and exported 8.64 million tons—or 1.2 million barrels a day—to its southern neighbor last month, according to Chinese customs statistics. The U.S. has ramped up efforts over the past year to target sources of funding and goods supporting Russia’s war effort.
What To Know
A notice issued by Shandong Port on Monday and viewed by Reuters stated that ships listed on the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctions list are now banned from docking, unloading, or receiving services. Shandong Port Group operates ports in Rizhao, Yantai, and Qingdao.
A 400,000-ton wharf comes into service on August 6, 2020, in Yantai, Shandong Province, China. Shandong Port Group, a leading port company that operates in Yantai and a string of other harbors in the province,… A 400,000-ton wharf comes into service on August 6, 2020, in Yantai, Shandong Province, China. Shandong Port Group, a leading port company that operates in Yantai and a string of other harbors in the province, has reportedly banned vessels subject to U.S. sanctions.
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At least eight large crude oil tankers subject to U.S. sanctions, each with a 2-million-barrel capacity, docked at these ports last month, primarily ferrying Iranian oil, according to Kpler, a data analytics provider for commodity markets.
The OFAC list includes vessels operating as part of what Washington calls a “shadow fleet” involved in sanctions-busting activities to transport oil from Iran, Venezuela, and Russia.
In December, the Biden administration announced new sanctions on 35 companies and vessels tied to Iranian oil shipments. About 90 percent of Iranian crude exports go to China, often sold at steep discounts or exchanged for goods instead of cash, according to market insiders cited by S&P Global last year.
What People Are Saying
Denying knowledge of the Shandong Port ban, Guo Jiakun, Chinese Foreign Ministry spokesperson said, when asked about it during Wednesday’s daily press briefing: “I’m not familiar with the specifics. More broadly, let me stress that China stands firmly against the U.S.’s illegal unilateral sanctions and long-arm jurisdiction that have no basis in international law or authorization by the U.N. Security Council.” Guo said on Wednesday.
What’s Next
Shandong Port Group predicted in a subsequent notice on Tuesday that the ban would have a limited impact on independent refiners, as most sanctioned oil imports arrive on vessels not affected by the restrictions. However, traders interviewed by Reuters suggested that stricter enforcement of the ban could drive up costs for these refiners.
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