Overview

• The US Treasury has imposed sanctions on Hebei Xinhai Chemical and Dongying port operators for facilitating Iranian oil shipments, escalating its efforts to cut off Iran's export revenue.
• Recent sanctions on Shandong refiners Luqing and Shengxing have disrupted operations, forcing them to sell products under new entities and creating difficulties in receiving crude oil shipments.
• State-run Shandong Port Group has denied entry to vessels carrying crude for sanctioned refiners, further complicating their operations and forcing cargoes to unload at alternate ports.
• Major state banks and state-owned CNOOC have ceased support for sanctioned refiners, with Luqing relying on smaller banks and losing crude supply to its 40,000 barrel-per-day refinery.
• The sanctions have deterred other independent refiners in Shandong from purchasing Iranian oil, widening discounts on Iranian crude and reducing Tehran's ability to generate revenue.