Geopolitics and Sanctions: Tanker Market Navigating Turbulent Waters at the Start of 2025


Source: Gibson Shipbrokers
According to Gibson, “firstly, it is important to note that SPG does not control all ports in Shandong Province, however, according to their website, they control major ports including Qingdao, Rizhao, Yantai, Dongying, Binzhou and Weifang, which together accounted for 2.4mbd out of the 3.3mbd of crude imported into the province in 2024. Secondly, it is somewhat unclear if all terminals within these ports fall under SPG’s remit, and thus are now unable to receive OFAC sanctioned ships. Nevertheless, given the scale of imports into SPG ports, the potential impact is sizeable. Looking at trade data, of the 2.4mbd of crude heading to these ports last year, approximately 1.1mbd of crude originated from Iran, Venezuela or Russia. However, given attempts by Iran and Venezuela to disguise the origin of their crude, the actual figures could be higher”.
The shipbroker added that “Iranian crude flows into China are likely to be most impacted, with 67% of the vessels tracked shipping Iranian crude to SPG ports last year featuring on the OFAC list, including 42 VLCCs, 8 Suezmaxes and 1 Aframax, which had been trading to SPG ports, but will now be unable to do so. The impact on Venezuelan flows for now looks much more limited. Just one OFAC sanctioned Aframax was tracked shipping Venezuelan crude to China in 2024. Whilst this looks suspiciously low, perhaps it suggests more sophisticated evasion tactics. The impact on Russian flows is more sizeable, as 43 OFAC listed Aframaxes and Suezmaxes with Russian crude onboard visited SPG ports last year, with the majority of Russia to China trade heading to non SPG ports. The Biden administration issued further sanctions against Russia today, and the incoming Trump Administration is also expected to step up sanctions against its adversaries”.
“So how impactful will the ban be? Based on the current sanctions list, VLCCs on the Iran to China trade are likely to be the most impacted sector, with 42 VLCCs which had been trading to SPG ports now unable to do so. Aframaxes and Suezmaxes impacted on the Russia to China trade number stands at 43, however, this is a smaller share of the overall (dark) fleet for these sizes. It is unclear to what extent these vessels could be diverted to different terminals. We could also see these vessels “swapped” with those which are yet to be sanctioned by OFAC, with the sanctioned ships moving into other parts of the Russian and Iranian oil supply chain. STS activity could also be used to ensure the final delivery leg is conducted on non-sanctioned ships. Overall, we count 344 LR2/Aframaxes, 149 Suezmaxes, and 194 VLCCs undertaking illicit activity, suggesting at least to some extent that these vessels can be swapped, provided they are not on the OFAC list (a total of 89 VLCCs are currently OFAC sanctioned)”, Gibson said.
The shipbroker concluded that “for the mainstream oil and tanker market, the hope is that the new port ban provides another barrier to trading sanctioned crude and ships, shifting demand from “dark” to “light”. It also reinforces an emerging (and still to be confirmed) trend of buyers shying away from sanctioned crudes due to fear of tougher sanctions from the incoming US Administration. Whilst it may be difficult to gauge the magnitude of the development, it is hard to see anything but upside for the mainstream tanker market”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide