After the US imposed sanctions on subsidiaries of Cosco, European refiners have received an unexpected boost, as less crude oil from the North Sea and West Africa heads east, Reuters reports. What is more freight rates have risen as oil producers seek non-blacklisted vessels.
A supertanker by COSCO Shipping Tankers has received a temporary waiver from US sanctions. The ship is now able to discharge crude oil cargoes. In fact, the VLCC Coswisdom Lake, which discharged some crude in Singapore last week, offloaded the rest of its oil at Brunei on October 16, Reuters said citing shipping data on Refinitiv Eikon.
The White House alerts Chinese shipping companies of not turning off their AIS, hiding Iranian oil shipments in violation of US sanctions, Reuters reports, while vessels navigating with their AIS shut down could be a danger to the overall navigation, posing a great threat to the other vessels sailing around them.
The recent developments see OFAC, the US Office of Foreign Assets Control, imposing sanctions on COSCO tankers and certain entities and individuals for transferring Iranian oil, which is against the US rules. Thus, OFAC has further explained who these sanctions impact and how the shipping industry is affected.
Reuters reports that almost a third of the tankers owned by COSCO Shipping Tanker have shut off their AIS systems after the U.S. imposed sanctions on the company for reportedly shipping Iranian crude. In the first week of October, a total of 14 COSCO Dalian ships, including nine VLCCs, have shut off their ship-tracking transponders and have stopped sending location data from their automatic identification system.
A Novatek official reported to Reuters that Novatek, the Russian liquefied natural gas (LNG) producer is looking to tranship its Yamal cargoes in Norway or Russia’s Murmansk, as the company is still unsure of its shipping activities, following the US’s sanctions on the Chinese COSCO tankers.
Freight rates to ship US crude to Asia are still on the rise, with costs to charter a supertanker increasing to a record $12 million on October the 3rd. This development comes as an aftermath of US’s sanction against two units of COSCO, alleging that they were involved in transporting crude out of Iran.
Following OFAC’s decision on issuing sanctions against COSCO companies, many were those affected, as well as the US-listed Teekay Group that has been qualified as a ‘blocked person’.
US’s Department of Treasury Office of Foreign Assets Control (OFAC) imposed six sanctions on six Chinese companies, amongst them COSCO, for transporting oil from Iran in defiance of sanctions set in place in November 2018. Sanctioned COSCO affects the shipping industry and those oil companies and traders who have entered agreements.
The ship Tian Xi of China’s COSCO Shipping Specialized Carriers Co., Ltd. has arrived at Qingdao Port after completing a voyage through the Arctic shipping route. Returning from Finland’s Helsinki, Tian Xi vessel has transported approximately 30,000 tons of high-quality paper pulp back to China.
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