China’s Shifting Crude Oil Import Strategies Amid Sanctions
China’s crude oil imports are adapting to new U.S. sanctions, leading to a reliance on non-sanctioned vessels. Analysts noted that refiners are shifting to independent oil terminals amid infrastructure challenges. The transfer of control at Dongying Port alleviated some operational slowdowns, while ship-to-ship transfers and enhanced Russian trade bolster overall import strategies despite ongoing sanctions and geopolitical concerns.
China’s crude oil imports are crucial to global tanker markets and are currently experiencing shifts due to sanctions, independent refiners, and the growth of a non-sanctioned fleet. Since early 2025, new sanctions imposed by the U.S., along with local actions from the Shandong Port Group (SPG), have threatened to impact crude imports significantly.
In reaction to these sanctions, Chinese importers have increasingly relied on non-sanctioned vessels to continue sourcing Russian and Iranian crude oil, as indicated by tanker tracking data from Vortexa. Emma Li, a senior market analyst at Vortexa, reported that the limitation on sanctioned tankers has led refiners to turn to independent oil terminals in cities like Dalian, Shanghai, Zhoushan, and Huizhou, which have begun accepting sanctioned shipments despite facing infrastructure challenges.
A strategic change occurred in late January when key terminals at Dongying Port transferred control from state-owned SPG to private entities, which helped facilitate the discharge of crude oil, including sanctioned tankers. This allowed the inventories at Dongying Port to increase, despite operational slowdowns at other terminals in Shandong, according to Ms. Li.
Nevertheless, the handling of Iranian crude remains problematic. Dongying’s capacity constraints affect its ability to process large tanker sizes, specifically those of 100,000 tonnes, combined with compliance issues at SPG-mandated ports, resulting in a decrease of Iranian crude imports to below 800,000 barrels per day in January. In response, market participants are utilizing ship-to-ship (STS) transfers in Malaysian waters to bypass these limitations, with success in reverting cargo discharges to 1.3 million barrels per day by mid-February.
In addition to these developments, Russia has bolstered its ESPO trade with the introduction of at least 17 non-sanctioned Aframax/LR2 or Suezmax tankers, entering the market via diverted routes. This increase in available tonnage has enabled February ESPO loadings at Kozmino Port to grow to 920,000 bpd.
With the recent imposition of a 10% retaliatory tariff on U.S. crude by China, there may be a renewed focus on Russian barrels. The competitive pricing of Russian long-haul oil, especially in light of the narrowing Brent-Dubai spread, suggests that these shipments will continue to be economically favored by Chinese refiners, despite the ongoing dialogues between Washington and Moscow regarding sanctions.
China’s crude oil import strategies exhibit flexibility, as refiners adapt to sanctions and a developing non-sanctioned fleet. The shift towards independent terminals and innovative shipping methods reveals a commitment to maintaining import flows, particularly from Russia and Iran. Although challenges remain, especially concerning Iranian crude, the expansion of non-sanctioned vessels and strategic decisions regarding trade routes indicate a resilient approach by Chinese importers to navigate evolving geopolitical landscapes.
Original Source: www.rivieramm.com
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