Iran tanker releases 2 million barrels of oil into China’s custody

A tanker from Iran delivered 2 million barrels of crude oil on Monday to a northeastern port in Dalian, China, ahead of US imposed sanctions. The barrels, according to reports from Refinitiv Eikon, are to go into a bonded storage tank.

Dune, a crude tanker under the National Iranian Tanker Co, deposited the large amount of oil at the bonded facility at Xingang, a section at the Dalian port. Xingang houses a few other tanks farms, some for commercial and emergency reserves. Dalian Port and the China National Petroleum Corp run business storage in Xingang.

Ship tracking information shows that the tanker departed Kharg Island in Iran on September 12. Another three tankers operated by NITC are scheduled for arrival at Dalian by the next few weeks. These are likely to stay in bonded storage as well. Government-owned refineries nearby have stated that they are not capable of processing oil from Iran.

Dalian Port officials, China National Petroleum Corp executives, National Iranian Oil Co executives, National Iranian Tanker Co executives and storage site managers and operators, all refused to comment.

Since July, state-owned entities, Sinopec, a refiner and Zhuhai Zhenrong Corp an oil and gas import-export trader have moved cargoes to National Iranian Oil Co vessels, in order not to disrupt the flow of supply, with the impending US sanctions.

By keeping the crude oil in a bonded storage site, the owners of the shipment will have a choice of selling to interested parties in China or others in neighboring countries.

The third biggest country in the Organization of Petroleum Exporting Countries (OPEC), Iran is struggling to sell crude oil before US sanctions come into effect on November 4. Iran has stored oil in Dalian before, during the 2014 sanctions. It was later sold to buyers based in India and South Korea.

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