The US Department of Defense has added China COSCO Shipping Corp. Ltd. and China National Offshore Oil Corp. to a list of companies allegedly supporting the Chinese military.
According to a notice filed with the Federal Register on 7 January, the Deputy Secretary of Defense determined that the entities listed in the notice qualify as “Chinese military companies”. These companies are involved in providing commercial goods or services that support the People’s Liberation Army or its associated organizations.
Furthermore, market participants said this action reflects an escalation in US-China tensions, although the immediate impact on petroleum trading and shipping remain uncertain. Traders are still evaluating the situation as they await the arrival of the new administration under Donald Trump. Reports state that the situation could cause a rise in VLCC rates however most don’t expect a huge impact for now amid low trading volumes.
In addition, other energy and shipping companies blacklisted are China General Nuclear Power Corp. (CGN), China National Chemical Corp. Ltd. (ChemChina), China National Nuclear Corp. (CNNC), China State Shipbuilding Corp. Ltd. (CSSC), CSSC Offshore & Marine Engineering (Group) Co. Ltd. (COMEC) and Sinotrans & CSC Holdings Co. Ltd.
The list also comprises Chinese companies in the energy transition space, including battery manufacturer Contemporary Amperex Technology Co. Ltd. and technology company Tencent Holdings Ltd.
