US sanctions Rizhao terminal prompt tanker diversions, refinery cuts

The United States’ recent sanctioning of the Rizhao Shihua Crude Oil Terminal in Lanshan, Shandong province has prompted a wave of tanker diversions and forced China’s largest refiners to reroute supplies and curb processing at some plants, industry tracking data and Chinese consultancies showed. The measures, announced last week by the U.S. Treasury, targeted the terminal and other vessels and facilities for receiving Iranian crude on board sanctioned ships, and took effect over the weekend as several very large crude carriers changed course away from Rizhao.

Tracking data show the Very Large Crude Carrier New Vista, chartered by Unipec, the trading arm of Sinopec, was diverted from Rizhao and is now heading to Ningbo and Zhoushan, with arrival expected October 15. Other large tankers carrying Brazilian, Omani and West African grades have been redirected to ports including Zhoushan, Ningbo, Caofeidian and Tianjin, with some vessels scheduled to arrive in late October. The diverted ships include VLCCs carrying roughly 2 million barrels each and at least one Suezmax class vessel of about 1 million barrels.

The sanctions have immediate operational consequences for refiners tied to...