Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say
By Siyi Liu, Trixie Yap and Chen Aizhu
SINGAPORE (Reuters) -Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer.
The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme.
Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said.
About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said.
Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers.
Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment.
Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said.
The sources declined to be identified due to the sensitivity of the matter.
Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries.
SHIPPING, SALES HEADACHES
The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources.
In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter.
It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed.
In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned.
In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed.
That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock.
State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said.
CNOOC did not respond to a request for comment. Calls to Haihua went unanswered.
The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Politico
an hour ago
- Politico
‘Kill shot:' GOP megabill targets solar, wind projects with new tax
Senate Republicans stepped up their attacks on U.S. solar and wind energy projects by quietly adding a provision to their megabill that would penalize future developments with a new tax. That new tax measure was tucked into the more than 900-page document released late Friday that also would sharply cut the tax credits in the Inflation Reduction Act for solar and wind projects. Those cuts to the IRA credits were added after a late-stage push by President Donald Trump to crack down further on the incentives by requiring generation projects be placed in service by the end of 2027 to qualify. The new excise tax is another blow to the fastest-growing sources of power production in the United States, and would be a massive setback to the wind and solar energy industries since it would apply even to projects not receiving any credits. 'It's a kill shot. This new excise tax on wind and solar is designed to fully kill the industry,' said Adrian Deveny, founder and president of policy advisory firm Climate Vision, who helped craft the climate law as a former policy director for Democratic Senate Leader Chuck Schumer. Analysts at the Rhodium Group said in an email the new tax would push up the costs of wind and solar projects by 10 to 20 percent — on top of the cost increases from losing the credits. 'Combined with the likely onerous administrative reporting burden this provision puts in place, these cost increases will lead to even lower wind and solar installations. The impacts of this tax would also flow through to consumers in the form of higher electricity rates,' Rhodium said. The provision as written appears to add an additional tax for any wind and solar project placed into service after 2027 — when its eligibility for the investment and production tax credits ends — if a certain percentage of the value of the project's components are sourced from prohibited foreign entities, like China. It would apply to all projects that began construction after June 16 of this year. The language would require wind and solar projects, even those not receiving credits, to navigate complex and potentially unworkable requirements that prohibit sourcing from foreign entities of concern — a move designed to promote domestic production and crack down on Chinese materials. In keeping with GOP support for the fossil fuel industry, the updated bill creates a new production tax credit for metallurgical coal, which is used in steelmaking.
Newsweek
2 hours ago
- Newsweek
Thousands Gather in Tehran to Mourn Dead from Israel Strikes
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Hundreds of thousands of people filled the streets of Iran's capital on Saturday for a state funeral honoring about 60 Iranians killed in Israeli strikes over the past few weeks, including top military commanders and nuclear scientists. Why It Matters In what President Donald Trump has called the "12 Day War," in mid-June Israel initially struck Tehran and several other cities in "Operation Rising Lion," a campaign it said was meant to preempt a planned Iranian attack and disrupt Iran's nuclear capabilities. Iran, which has said its nuclear program is for peaceful purposes, retaliated, though Israeli defense systems—bolstered by U.S. military technology—intercepted nearly all incoming missile fire, according to Israeli officials, although Iran did strike a hospital southern Israel last week. More than 600 Iranians were reported killed by Israeli strikes, and 28 Israelis killed by Iranian strikes, with thousands wounded it both countries. Last weekend, the U.S. joined Israel in its war against Iran by bombing three nuclear sites, Fordow, Isfahan, and Natanz, in the largest B-2 operation in U.S. history. There were no reported casualties. Israeli strikes killed civilians, nuclear scientists, and high-level military officials, such as Hossein Salami who served as the head of the Islamic Revolutionary Guard Corps (IRGC), Mohammad Bagheri, chief of staff of Iran's armed forces, and Amir Ali Hajizadeh, commander of the IRGC's Air Force. Thousands of Iranians attend the funeral ceremony for approximately 60 people killed in Israeli strikes on Iran, including high-ranking military officials, nuclear scientists, and civilians, during a state funeral service in Enqelab Square on June... Thousands of Iranians attend the funeral ceremony for approximately 60 people killed in Israeli strikes on Iran, including high-ranking military officials, nuclear scientists, and civilians, during a state funeral service in Enqelab Square on June 28, 2025 in Tehran, Iran. MoreWhat To Know On Saturday, thousands of mourners dressed in black flooded the streets of Tehran in a state funeral procession for about 60 of those killed in the strikes, with IRGC-affiliated outlet Tasnim News Agency describing them as "martyred." Caskets of the dead were covered in Iranian flags. The outlet reported the procession, in which participants were seen carrying flags and banners, commenced near the University of Tehran in Enghelab (Revolution) Square and ended at the Azadi (Freedom) Square. Iranian President Masoud Pezeshkian marched in the procession and Foreign Minister Abbas Araghchi was seen giving his prayers, while Supreme Leader Ayatollah Ali Khamenei was not spotted. Mourners attend the funeral ceremony of the Iranian armed forces generals, nuclear scientists and their family members who were killed in Israeli strikes, at Islamic Revolution Square (Enghelab Square) square, in Tehran, Iran, Saturday, June... Mourners attend the funeral ceremony of the Iranian armed forces generals, nuclear scientists and their family members who were killed in Israeli strikes, at Islamic Revolution Square (Enghelab Square) square, in Tehran, Iran, Saturday, June 28, 2025. More AP Photo/Vahid Salemi) Iran's semi-official Mehr News Agency shared photos of various models of Iran's ballistic missiles showcased during the funeral procession. Pictures also showed Israeli and American flags being walked over and some burned, while the Associated Press reported that some people chanted "Death to America" and "Death to Israel." Salami, who was honored on Saturday, had leveled a threat to the United States in May, saying Iran would "open the gates of hell" if attacked by Israel or America. He was a defiant voice against Israel and had praised Hezbollah's operations in its war against the country in 2024. Bagheri had warned for years that his forces were ready for military action against the country. Others commemorated included women, children and nuclear physicists involved in Iran's nuclear energy and enrichment activities. The state funeral comes days after a fragile ceasefire was agreed upon between Israel and Iran. People hold flags near posters displaying assassinated military leaders, including Commander-in-Chief of the IRGC Hossein Salami (C), as thousands of Iranians attend the funeral ceremony for approximately 60 people killed in Israeli strikes on Iran,... People hold flags near posters displaying assassinated military leaders, including Commander-in-Chief of the IRGC Hossein Salami (C), as thousands of Iranians attend the funeral ceremony for approximately 60 people killed in Israeli strikes on Iran, including high-ranking military officials, nuclear scientists, and civilians, during a state funeral service in Enqelab Square on June 28, 2025 in Tehran, Iran. MoreWhat People Are Saying Iranian President Masoud Pezeshkian wrote in a Persian in an X, formerly Twitter, post on Saturday: "From the bottom of my heart, I thank you dear people; With love, you bid farewell to the martyrs of our homeland, and our voice of unity reached the ears of the world. We have learned from Husayn ibn Ali (peace be upon him) not to submit to humiliation and not to bow our heads before oppression. Serving such a noble nation is the honor of my life. Forever Iran " Supreme Leader Ayatollah Ali Khamenei wrote in Persian on X on Saturday: "The Iranian nation should know that the reason for the opposition to America is that they want Iran to surrender, and this is a great insult to the Iranian nation by the Americans, and such a thing will never happen." President Donald Trump told reporters on Friday that the U.S. would "absolutely" consider bombing Iran against if it is found enriching uranium to "concerning" levels. What Happens Next The ceasefire between Israel and Iran, which went into effect on June 24, remains fragile. Trump said the U.S. and Iran are due to hold new talks about the country's nuclear capabilities. "We're going to talk to them next week, with Iran," Trump said at the NATO summit in the Netherlands on Wednesday. "We may sign an agreement. I don't know." On Saturday, Araghchi posted on X, "If President Trump is genuine about wanting a deal, he should put aside the disrespectful and unacceptable tone towards Iran's Supreme Leader, Grand Ayatollah Khamenei, and stop hurting his millions of heartfelt followers."
The Hill
3 hours ago
- The Hill
Does your business have a Plan B for the Trump tariffs?
I have a client in New Jersey who manufactures industrial films. A big source of their supply comes from two Chinese companies. You would think with President Trump's tariffs they would be suffering, right? Luckily, the owner of the company (and her partner) paid attention. Going all the way back to 2023 they knew — like we all knew — that the presidential election would be tight. By mid-2024 it got even tighter. And what was then-candidate Trump saying back then? He was promising significant tax cuts but providing no answers as to how they would be funded. He was promising to overturn many of the Biden administration's regulations, from environmental to DEI to overtime pay. He was promising to deport millions of undocumented immigrants. But more importantly to my client, Trump was planning on handing down big tariffs, especially targeted at China. And they took him seriously. They're not Trump supporters, but they are pragmatists. So back in 2023 they started searching for alternative suppliers. They reached out to nonprofits like the World Trade Center Association and Small Business Development Centers, and they got help from the International Trade Administration. They traveled to India, Malaysia and Brazil. They realized that if Trump was elected, their main source of supply would be seriously threatened. They also understood that the Biden administration was no big fan of China either. You can't run a business that's dependent on such a precarious source of supply that it could be seriously disrupted by a single politician. So they took action. Unfortunately, some business owners didn't. The media has been reporting about small businesses that are now suffering because of Trump's tariffs. A steel products manufacturer in Salt Lake City says his company could be 'devastated.' A flower shop owner in California that buys products from South America laments the significant increase in her costs. Two Iowa business owners, who buy 75-80 percent of their products from overseas, are looking at a 'nightmare' holiday season. According to a CNN report, a high-end electronics manufacturer has had to cut employee hours, and a guitar seller fears the 'mass extinction' of small businesses. I feel bad for these business owners, but life isn't fair. And history repeats itself. Businesses, regardless of their size, are always at the mercy of government interventions. Today is no different. Which is why my client and her partner, having read history, took Trump's tariff warnings seriously. They're smart. And like the many other smart business people I have met, they share one common characteristic: They're always looking ahead. They always have a Plan B. They diversify. Investors know that too much reliance on one party creates risk. There's a reason the SEC requires that companies disclose in their financial statements when a customer represents more than 10 percent of their business. The flower-seller, guitar maker and electronics manufacturer all relied too heavily on foreign supply for their businesses. Fair enough — this model has, until now, worked well for them. But it's a risky model when you rely too much on one source of supply for your livelihood — particularly when you have new leaders telling you that they're going to take actions that will put that source of supply in jeopardy. Of course that's easier said than done. But, like my New Jersey client, those small-business owners should also have been looking ahead and mitigating their potential risk. My client saw the writing on the wall two years ago and took steps to prepare. And they weren't the only ones. The chief strategy officer for a robotics company, for example, said he always 'plans ahead 9-12 months' and had a 'plan B' to produce necessary hardware outside of China, where it was operating before. 'Maybe this is also a good time to say, 'Let's not put all the eggs in one basket,'' he told CNN, 'and, you know, start looking on other kind of territories that will reduce the risk for us going forward.' According to an NPR report, a Maryland business owner — a former Marine (no surprise) — has been stockpiling products for months in advance of looming tariffs, admitting that his 'warehouse was bursting.' But then there are the countless other small-business owners who just like to keep their fingers crossed and hope against hope that nothing bad will happen. That's no way to run a business, especially when there are employees with families who are relying on your decisions. So do I feel bad for those business owners suffering under Trump's tariffs? I do. But this is the game you play when you run a business. You take risks, you reap rewards. And if you don't plan ahead and diversify, you suffer the consequences. Gene Marks is founder of The Marks Group, a small-business consulting firm.
