SINGAPORE, October 15, 2025 — The global oil shipping network is facing renewed turbulence after U.S. sanctions on a key Chinese crude oil terminal prompted trading companies to divert at least five tankers to alternative ports, threatening congestion at major Chinese energy hubs, according to market sources and vessel tracking data.
The sanctions, announced by Washington last Friday, targeted the Rizhao Shihua Crude Oil Terminal in Lanshan, a critical import hub in Shandong province. The terminal, partially owned by Sinopec Kantons Holding (0934.HK) — a subsidiary of China Petroleum and Chemical Corporation (Sinopec) — was penalized for allegedly receiving Iranian oil shipments on sanctioned vessels.
U.S. Sanctions Disrupt Crude Flows to China’s Refining Hub
The U.S. Treasury’s action immediately disrupted Sinopec’s import logistics, forcing refiners and trading houses to reroute tankers to Zhoushan and Tianjin — two of China’s busiest crude oil handling terminals.
Industry data indicates that roughly 20% of Sinopec’s total crude imports flow through the Rizhao Shihua facility, underscoring the scale of the disruption.
“This sanction hits a major artery of China’s crude supply chain,” said an industry executive familiar with the rerouting. “The immediate consequence will be longer unloading delays and tighter onshore storage capacity at alternative terminals.”
Tanker Diversions Create Congestion at Zhoushan
At least four large crude carriers (VLCCs) and one Suezmax vessel have diverted from Lanshan to Zhoushan, a port located off Zhejiang province. Zhoushan is an important refining and storage hub connected via pipeline to Sinopec’s eastern refineries, including those in Shanghai and Ningbo.
According to LSEG and Kpler tracking data, the following diversions are underway:
- VLCC New Vista – rerouted to Zhoushan and Ningbo; capable of carrying 2 million barrels of oil.
- VLCC Xin Yue Yang – transporting 2 million barrels of Omani crude, expected to arrive at Zhoushan by October 21.
- VLCC Spherical – carrying 2 million barrels of Brazilian crude, awaiting discharge instructions.
- Suezmax Fulger – transporting 1 million barrels of Egyptian Arco crude, scheduled to unload at Zhoushan on October 19.
Traders warn that the influx of large vessels could strain Zhoushan’s berthing capacity and lead to bottlenecks in crude transfer operations.
“Zhoushan’s infrastructure is robust, but handling several diverted VLCCs simultaneously will test its limits,” said a shipping analyst at a Singapore-based brokerage.
Tianjin Port Sees Rerouted Cargo from TotalEnergies
Meanwhile, the VLCC Habshan — chartered by CSSA, the shipping arm of French energy major TotalEnergies (TTEF.PA) — has shifted destination to Tianjin, according to LSEG data.
The Habshan is carrying approximately 2 million barrels of Congolese Djeno crude, and is expected to arrive on October 26.
Tianjin serves as a strategic hub for Sinopec, hosting its Tianjin Petrochemical refinery and a state oil reserve. Analysts say the diversion underscores China’s efforts to distribute incoming cargoes to maintain refinery feedstock amid U.S. restrictions.
Neither TotalEnergies nor Sinopec responded to Reuters’ requests for comment.
Sinopec Faces Potential Business Impact from U.S. Measures
Sinopec Kantons Holding acknowledged on Monday that the U.S. sanctions could adversely affect its operations, though it did not disclose the extent of potential losses. The company’s shares have seen heightened volatility since the announcement.
Industry insiders note that Sinopec’s trading arm, Unipec, is working swiftly to minimize disruption by reallocating shipments and negotiating temporary berthing slots at alternative Chinese ports.
“Unipec’s swift response shows how critical crude diversification has become for Chinese refiners,” said Florence Tan, a senior oil market correspondent. “But congestion risks and demurrage costs are unavoidable in the short term.”
Broader Implications for Global Crude Trade
The U.S. sanctions on the Rizhao Shihua terminal mark a significant escalation in efforts to curb illicit Iranian oil flows, a move that could reshape Asian crude trade patterns.
Market observers believe the action could tighten shipping capacity in East Asia, increase freight rates, and divert trade routes toward Southeast Asia and the Middle East.
Additionally, port congestion at Zhoushan or Tianjin may delay tanker turnaround times, affecting crude deliveries not only to China but also to regional buyers reliant on re-exported petroleum products.
Strategic Context: U.S.-China Energy Tensions Intensify
The sanctions come at a time of growing U.S.-China trade and geopolitical friction, particularly over energy security and technology exports.
Washington’s latest move signals a renewed focus on enforcing sanctions related to Iranian and Russian oil flows, while Beijing continues to expand its import diversification strategy through deals with Middle Eastern, African, and Russian suppliers.
“This episode illustrates the fragility of China’s maritime oil supply chains in the face of geopolitical shocks,” noted Chen Aizhu, senior energy reporter.
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