Chinese Oil Trader Continues Bookings of COSCO-Owned Tankers
Chinese oil trader Unipec has resumed using tankers owned by state-owned shipping group COSCO, according to trade sources. This is after the United States alleviated sanctions temporarily on the Chinese state-owned shipping group.
Washington set sanctions on Chinese tanker firms in late September. This is one of the most significant sanctions actions by the U.S. government since its restraint on Iranian oil exports. The sanction was because of alleged participation in moving crude oil from Iran.
One of the firms blacklisted was COSCO Shipping Tanker (Dalian). Also, it is a subsidiary of China’s state-owned shipping group COSCO.
Since COSCO prompted Unipec., the trading wing of Asia’s top oil refiner, Sinopec, will make substitute bookings for shipments from the Middle East Gulf. This was according to shipping sources who told Reuters in September.
Concern over shippers dropping foul of the United States sanctions sent oil freight costs to record highs all over the world. Also, it added millions of dollars to the price of every journey.
Last week, Washington gave interim approval for firms to wind down transactions with the labeled COSCO subsidiaries.
A notice from the U.S. Treasury granted the “maintenance or wind-down of transaction.” It includes offloading non-Iranian crude oil, including the COSCO subsidiary, until Dec. 20.
One of the trade sources says the U.S. had held discussions with industry officials. Also, it allowed the issuance of general licenses, which would enable new chartering exercise with COSCO tankers.
It was not clear if this is only applicable to the tankers that belong to the COSCO individuals.
Moreover, United States officials could not urgently reach for a comment about it.
On Tuesday, Refinitiv’s data present one COSCO owned tanker Xin Pu Yang was sailing to Asia with a cargo of oil chartered by Unipec.
Chinese State-Owned Shipping Group on the Sailing Ship
A Sinopec spokesperson refused to comment on the tanker Xin Pu Yang that has seen sailing to Asia.
The investor relations manager with COSCO Shipping Energy Transport said he was not immediately informed of the latest progress when asked for a comment.
Data from shipping valuation firm Vessels Value showed COSCO Shipping had 17 vessels in its fleet. It includes four supertankers, which can carry 2 million barrels of oil each, and other smaller ships.
The COSCO Group, whose subsidiaries not afflicted by United States sanctions, has a fleet of more than 100 oil tankers. Aside from that, they also have almost 40 other supertankers, according to the Vessels Value.
Chinese companies, including Sinopec, were continuing the chartering COSCO tankers. This is according to a trading executive with a Chinese oil major.
The official said the government scolded Sinopec for not being a very responsible and careful state-owned enterprise. He was referring to the interruption in COSCO charters.
According to shipping sources last week that at least three other COSCO tankers were sailing their way to Asia. Also, the tankers were not able to discharge their oil due to the U.S. and chartered by other firms.