Bloomberg’s Report on How Iran Circumvents Oil Sanctions
Private terminals in China have received shipments from tankers sanctioned by the U.S., indicating that the region, which hosts the largest buyers of Iranian and Russian crude oil, has found ways to circumvent the reluctance of major port operators.
After the state-owned Shandong Port Group sold at least one terminal to a private entity, Dongying in the eastern Shandong province became a key port for receiving these shipments. This was revealed by traders familiar with the matter. According to these sources, the tanker Si He, which was sanctioned on January 10, discharged over 744,000 barrels of Russian ESPO crude oil at Dongying port last week. This information was confirmed by traders and the commodity tracking platform Kpler.
Other centers have also emerged for these types of shipments, including an independent dock at Yangshan, south of Shanghai, and a terminal at the southern port of Huizhou, which received an Iranian oil shipment last month.
Since Shandong Port Group last month asked its operators to refrain from accepting sanctioned tankers, private terminals and docks have gained more importance. This decision was made in response to increased scrutiny from Washington.
The escalation of sanctions by the Biden administration in its final days has bolstered this trend. Relying on these smaller docks, China’s independent refineries can continue to purchase cheap crude oil while simultaneously protecting large logistics companies and state refineries that manage cargo and container shipments.
Based on Bloomberg’s calculations from official customs data, purchases of Russian and Iranian crude oil accounted for a quarter of China’s total imports in 2024. However, stricter Washington restrictions since late last year have complicated this trade, forcing buyers to be creative in circumventing sanctions.
The continued acceptance of sanctioned tankers indicates the pressure on China’s private refineries and also Beijing’s willingness to overlook the sanctions.