US sanctions Chinese companies for shipping Iran oil
The US has sanctioned several Chinese companies and their top officials for allegedly shipping Iranian oil, putting dozens of supertankers off limits to western energy traders.
China has emerged as one of the last remaining buyers of Iranian crude as Washington tries to reduce Tehran’s export level to zero by ratcheting up sanctions.
The US Treasury department on Wednesday blacklisted two oil tanker subsidiaries of Cosco, a leading Chinese shipping and logistics company, although the parent company remains unaffected. China Concord Petroleum, Pegasus 88 Limited, Kunlun Shipping Company and Kunlun Holding Company were also sanctioned.
The sanctions against Cosco subsidiaries alone could affect 40-50 tankers, about half of which are very large crude carriers — the giant supertankers used by international oil traders for long-haul voyages, said Erik Broekhuizen, head of tanker research and consulting at Poten & Partners, an energy broker in New York.
“Western oil companies would probably not want to touch these ships,” Mr Broekhuizen said. “Some people might find themselves in a scramble” to find replacement vessels, he added.
The Financial Times reported in August that the Trump administration was tracking the movement of tankers linked to Bank of Kunlun, a subsidiary of China’s biggest state-run oil company China National Petroleum Corporation, amid signs that the vessels are helping to transport Iranian crude to China in defiance of US sanctions against Tehran.
In August at least three Kunlun-linked tankers had been spotted interacting with Iranian vessels since May through Planet Labs satellite imagery, which was provided to the Financial Times by TankerTrackers alongside maritime data from MarineTraffic.
State-owned Cosco describes itself as the biggest shipping company in the world by deadweight tonnage following a merger with its rival China Shipping, with more than 1,000 vessels under its control and an overall aim “to undertake the mission of globalising Chinese economy”.
The company did not immediately respond to a request for comment on the US sanctions.
By targeting two subsidiaries of such a major Chinese state-backed enterprise the US is trying to raise the stakes for Beijing for continuing to do business with Iran.
In July the US issued the first sanctions against a Chinese company since it eliminated the waiver that had allowed China, a big customer of Tehran, to keep buying Iranian oil. In that move Zhuhai Zhenrong, one of China’s largest state-backed oil traders, was blacklisted, angering China’s foreign ministry.
The US sanctions will force western companies to avoid using Cosco tankers covered by the restrictions for fear of being targeted by sanctions themselves. Insurers will also be less likely to cover vessels they fear may be doing business with Iran.
But analysts think it is unlikely China will immediately stop taking Iranian crude, despite the US pressure. Beijing is keen not to be seen being bullied by Washington when the two countries are already fighting over trade.
TankerTrackers said data from the Marine Traffic website showed 47 active tankers owned by one of the subsidiaries, describing it as a “truly global” company.
One Suezmax tanker owned by the sanctioned entity, the Da Ming Hu, is currently close to port in the US portion of the Gulf of Mexico. The 1m barrel capacity tanker lists its destination as the Port of Galveston Offshore Lightering Area in Texas, one of the main locations for loading US crude oil exports.
Another, the Cospearl Lake — a 2m barrel capacity supertanker — is currently hauling a full cargo of US crude oil to South Korea, having left the same loading facility in Galveston earlier this week.