Iran’s NITC Vessels Continue Discharging Oil in China

A critical part of the US “maximum pressure” campaign on Iran is getting the regime’s oil exports to zero.  On May 2, 2019, the Trump administration terminated exemptions waivers to all eight jurisdictions that allowed ongoing imports of Iranian oil for a period of six months. Despite the expiration of these waivers, however, China remains Iran’s biggest crude oil buyer and continues to import Iranian oil to this day.

On June 20, 2019, the sanctioned National Iranian Tanker Company (NITC) ship SALINA made the first post-waiver delivery of Iranian crude oil at the Jinxi Refining and Chemical Complex. In an effort to crack down on Chinese imports, on July 22, 2019, the U.S. attempted to restrict China’s purchases of Iranian oil and sanctioned the Chinese energy company Zhuhai Zhenrong Co Ltd, “for allegedly violating restrictions on Iran’s oil sector.” 

In spite of this, NITC crude oil tankers look like they will continue to visit ports in China. NITC Crude Oil Tankers SONIA I arrived at Jinzhou Port, China on July 22, 2019 and SEVIN on July 24, 2019. The vessels arrived fully loaded with their “draft” (indicating how full or empty a vessel is) at 15.7 and 15.9 from Iran, respectively. SONIA I departed Jinshou on July 25, 2019 with a draft at 9.5 – indicating it had discharged its cargo there. Similarly, SEVIN departed Jinzhou on July 27, 2019 with a draft at 9.5. These now look to be additional deliveries of crude oil at China’s Jinxi Refining and Chemical Complex following the SALINA on June 20, 2019, and the HUMANITY which arrived at the Jinzhou Port on July 19, 2019. However, HUMANITY’s satellite transponder, which tracks the vessel’s position, has since been turned off.

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

Similarly, on July 21, 2019, the NITC Crude Oil Tanker DANIEL entered the Chinese port of Huizhou full with a draft at 19. On July 23, 2019 the vessel departed with a draft at 11.5, indicating another discharge of crude oil at a Chinese port. According to publicly available ship tracking information, DANIEL called at the MaBianZhou CNOOC Crude Terminal, suggesting the delivery was for the CNOOC operated Huizhou Refinery.

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

China will in all likelihood continue to defy U.S. oil sanctions, despite the expiration of waivers in May 2019 and U.S. willingness to impose sanctions against Chinese companies.  Iranian oil arrives in China almost daily. Based on ship tracking data the NITC tanker STREAM discharged at Tianjin on June 19, 2019, while AMBER, SALINA and C. INFINITY offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. According to OilPrice.com, “Chinese companies have continued to import Iranian crude, but instead of reporting the crude imports, which would violate US sanctions, they’re storing the oil in bonded storage tanks situated at Chinese ports.” 

Allowing Iran to continue to discharge crude at ports in China not only pours money into regime coffers, it frees up Iranian tankers instead of forcing them to act as storage units. The U.S. government might therefore consider sanctions on Chinese port authorities and operators that are continuing to allow Iran to circumvent sanctions and discharge Iranian crude.