Privately-run terminals in China have taken deliveries from US-sanctioned oil tankers, suggesting that a region that is home to the country’s largest buyers of Iranian and Russian crude is finding ways to circumvent the reluctance of larger port operators.
Dongying, in the eastern Shandong province, became a key receiving port after state-run Shandong Port Group sold at least one terminal to a private entity, according to traders familiar with the matter. They asked not to be named as the information is not public.
The Si He, a tanker sanctioned on Jan. 10, discharged more than 744,000 barrels of Russian ESPO crude at Dongying last week, according to the traders and commodities-tracking platform Kpler.
Other hotspots have also emerged, including an independently-run berth in Yangshan, south of Shanghai, and a terminal in the southern port of Huizhou, which received a shipment of Iranian oil last month.
Private alternatives have risen in prominence since Shandong Port Group last month urged operators to reject blacklisted tankers, responding to increased scrutiny from Washington. A salvo of sanctions from the departing Biden administration reinforced the trend.
By leaning on these smaller options, so-called teapot refiners can continue taking discounted crude while shielding China’s high-profile logistics names, which handle cargo and container shipments, and large refiners.
China’s purchases of crude from Russia and Iran made up a quarter of its total imports in 2024, based on Bloomberg’s calculations of official customs data. Washington’s tighter restrictions from late last year have complicated the trade, however, and forced buyers to be creative if they are to keep accessing cheap crude.
The continued willingness to take blacklisted vessels is a reminder of the pressure China’s private refiners are under — and of Beijing’s willingness to continue looking the other way.
The divested Dongying terminal is now held by Baogang International, according to the traders. Now under private ownership, they are able to take sanctioned tankers, and to cut back the cost of transferring crude from one vessel to another, often to cloud its origin. The terminal, however, can only handle Aframaxes and isn’t equipped to receive very-large crude carriers used to ship Iranian oil, the people said.
A media representative for Shandong Port Group said he wasn’t familiar with the divestment of terminals at Dongying. Baogang International didn’t respond to requests for comment via telephone calls and email.
Shanghai’s Yangshan hasn’t received Russian crude in more than two years. Since Jan. 10, at least two sanctioned tankers that took more than 1.2 million barrels of Sokol oil from Russia’s Far East, called at Yangshan. A third blacklisted vessel is due to reach the berth this week, data from Kpler show.
The Yuri Senkevich, a Sovcomflot ship that’s sanctioned, was the first to discharge, after leaving Sakhalin 1 on Jan. 20 with nearly 700,000 barrels of Sokol, and then discharged them at Yangshan on Jan. 28, data show.
Yangshan is not directly linked to any oil refineries, which means the barrels are meant to wait in storage tanks for transshipment elsewhere. The storage at Yangshan is managed by privately-run Yangshan Shengang International Oil Logistics Co. Ltd.
Shengang International didn’t respond to requests for comment via telephone calls and email.
A port in southern Guangdong province, Huizhou is another emerging logistics partner. One of its terminals is operated by Huaying Petrochemical, a privately-run storage and terminal operator controlled by Shanghai-listed Wintime Energy Group Co.
Late last month, the terminal received nearly 1 million barrels of Iranian crude from Suezmax Nichola, which in turn took them from an Iran-owned tanker Salina, ship-tracking data show.
A spokesperson for Wintime said in an emailed response that its Huizhou terminal has received crude from Malaysia and Singapore — but not Iran — adding that the company and its subsidiary Huaying are operating in accordance with Chinese regulations.