US targets Chinese dominance in maritime sector with new port fees proposal
The Office of the US Trade Representative (USTR) began seeking public comments last week on proposals for new port fees targeting Chinese operators, Chinese-built ships, and companies ordering newbuilds from Chinese shipyards.
Under the proposals, Chinese-owned vessels would be charged up to $1m per US port call, or at a rate of up to $1k per net ton of the vessel’s capacity. Chinese-built tonnage would be charged up to $1.5m per port visit, depending on the percentage of such ships in the operator’s fleet. Operators with 50% or more of their orders in Chinese shipyards, or vessels expected to be delivered from Chinese yards over the next 24 months, will be charged up to $1m per vessel per entrance to a US port. Other measures in the proposals are aimed at promoting the use of US-built and US-flagged ships.
The proposals, published late last Friday, are due to be discussed on March 24 and could be adopted shortly after.
Containerships would likely be hardest hit as they often call at several ports on each visit to the US. Around 21% of the individual tankers involved in exporting from the US in 2024 were built in China. For imports, around 22% of the tankers involved were built in China. Around two-thirds, in both cases, were Japanese or Korean-built. US-built ships were 1% or less. Current US port costs for oil tankers range between roughly $20k and $83k, depending on port and vessel class.
Adding an extra $500k to $1.5m per voyage would add an additional cost of between $7.14/t and $21.43/t for Aframaxes caught up by these proposed fees. For Aframax shipments from the US Gulf to Mediterranean (TD25), an extra $7.14/t would make US crude considerably less attractive to European refiners than alternatives, such as from Latin America, west Africa, the Mediterranean, North Sea, or Mideast Gulf. Therefore, oil companies would be likely to charter tankers that would not attract a penalty.
China is the world's largest shipbuilder, taking up about 51% of the total newbuilding deliveries in 2024, an increase of 17 % from 2019.
Such a shift could benefit other shipbuilding nations like South Korea and Japan, but their limited capacity makes a large-scale move away from Chinese yards difficult. Meanwhile, mandates for US-flagged and US-built tankers face significant hurdles as the US has not built a new crude tanker since 2017 and lacks the infrastructure for large-scale production. Expanding the domestic fleet under Jones Act-style restrictions would drive up costs. The proposals include mandating that 1% of US seaborne exports per year should be exported on US-flagged vessels by US operators with that rising to 3% after two years, 5% after three years, and 15% after seven years.
China controls 95% of global shipping container production and plays a growing role in ship leasing and financing. Retaliatory actions—such as tariffs or shipping restrictions—could disrupt crude and product flows.
US slaps more sanctions on Iranian oil
The latest US sanctions, announced by the State and Treasury Departments on Monday, target 22 individuals and 13 vessels linked to the shipment of Iranian crude. The sanctioned entities are spread across Iran, the UAE, Hong Kong, India, and China, reinforcing Washington’s ongoing effort to disrupt Iran’s oil trade.
Of the 13 new tankers included, 5 are VLCCs (average age of ~19 years), 3 Aframaxes (~22 years), 1 Panamax (21 years) and 4 Handy tankers (~26 years). Hence, the latest round of US sanctions takes the share of tankers under sanctions versus the overall tanker fleet (crude and product) to 11% of tanker capacity – 11% for the VLCCs, 11% for Suezmaxes, 16% for Aframaxes/LR2s, 6% for Panamax/LR1s, 4% for MRs and 3% for Handy tankers.
Despite successive rounds of sanctions, Iran has consistently adapted, leveraging intermediaries—particularly in China and the UAE—to sustain crude exports. While the US aims to tighten enforcement, historical patterns suggest that Iran’s exports will persist through opaque channels, albeit with increased operational risk and higher transaction costs.
The targeting of specific vessels introduces fresh uncertainty into the tanker market, particularly for shadow fleet operators engaged in Iranian crude transport. Sanctioned ships may be forced out of rotation, potentially tightening vessel availability. So far this year, the 101 tankers sanctioned by the US in 2024 for their involvement in Iranian oil markets have loaded just nine cargoes, all of them Iranian oil.
Should Iranian crude face greater obstacles reaching the market, alternative supply sources could step in. The US has ramped up production and OPEC+ can adjust output if required. However, given that Iranian crude trades at a discount and appeals to price-sensitive buyers, it is likely that Iranian oil will continue to flow.
EU and UK agree more sanctions on Russia
On Monday, the EU and UK announced new sanctions targeting Russia’s energy exports and maritime logistics. The EU’s 16th sanctions package introduces a ban on primary aluminium imports and expands restrictions on Russia’s ‘shadow fleet’—adding 74 more vessels to its blacklist, bringing the total to 153. The UK sanctioned 40 tankers on Monday. Since first targeting Russian oil shipments in July 2024, the UK has sanctioned over 100 vessels.
The EU has introduced measures to curtail the operations of high-risk, non-compliant tankers. A critical new restriction prohibits the temporary storage or free-zone handling of Russian crude and petroleum products in EU ports—a practice previously allowed under price cap compliance for re-export to third countries. This move effectively shuts off a loophole that had enabled Russia to use EU infrastructure to facilitate oil trade under price cap conditions.
The new sanctions prohibit any transactions, direct or indirect, with key Russian oil export hubs, including Ust-Luga, Primorsk, and Novorossiysk, if they involve high-risk shipping practices. These ports are among the most significant gateways for Russia’s crude and refined product exports, making their restriction a substantial challenge for Russia’s energy trade. Flows of non-Russian oil, such as Kazakh CPC Blend via Novorossiysk, will not be affected.
While European authorities tighten enforcement, Washington appears to be recalibrating its stance. Despite existing sanctions, US enforcement efforts may slow in the near term as Trump tries to make a deal with Russia over the war in Ukraine. But if Putin proves unwilling to provide the concessions the US is looking for, we could see another ramp up in US sanctions on Russian exports. EU and UK sanctions have, historically, had less impact than US sanctions.
First Dar Blend cargo in a year loads Sudan
The first cargo of Dar Blend since February last year has departed from Sudan. The Suezmax tanker Toska departed from Bashayer with 1 million barrels of South Sudanese crude oil on Monday, according to vessel tracking data. It is the newbuild tanker’s first voyage.
Dar Blend exports of around 100k b/d – equivalent to roughly five Aframaxes a month – have been halted since February last year. The pipeline transporting Dar Blend from where it is produced in landlocked South Sudan to the port in Sudan suffered blockages and ruptures because of a shortage of diesel to help the crude oil flows. Repairs to the pipeline were delayed by the war in Sudan and flooding.
Since October 2021, around 50% of Dar Blend exports have been to Fujairah in the UAE. Trader Montfort was a buyer of heavy sweet Dar Blend for its 67k b/d Fort refinery at Fujairah, a major producer and exporter of VLSFO. Most of the rest went to Singapore and Malaysia. Kpler notes that resumed Dar Blend flows are bearish for Asian VLSFO markets which have been pressured in recent months by ample supplies and sluggish bunkering demand.
Aframaxes lifted 61% and 65% of Dar Blend exports at Bashayer in 2022 and 2023, respectively. A full return inflow of Dar Blend would lift demand for both vessel classes in the Red Sea, where a halt (although still tentative) to Houthi attacks on merchant shipping has improved the security situation in the region.
Given the ongoing volatile situation in Sudan, exports remain at risk. But a long-term resumption could displace some alternative crude supplies used for producing VLSFO, such as Argentina’s Escalante and Chad’s Doba Blend, Kpler says. A switch from Escalante or Doba Blend to Dar Blend would reduce tonne-miles for Fujairah’s imports by 71%-76%.
EU suspends sanctions on Syria
The EU decided on Monday to suspend some sanctions on Syria, including on its banking and energy sectors. The country’s new president Al-Sharaa has repeatedly stressed that the lifting of sanctions is key to the country’s reconstruction after over a decade of war. Most US sanctions remain in place despite some relief announced on 6 January.
The lifting of sanctions should make it easier for European firms to deal with the Syrian energy sector. An eventual return to global energy markets could see the country become a source of shipping demand in the Mediterranean region. Syria was importing around 24k b/d of crude oil from Iran by sea in the first three-quarters of 2024 (under Assad). The easing of sanctions may allow it to tap other, compliant suppliers, including in the Mideast Gulf and Mediterranean.
The EU will suspend sectoral measures on Syria’s energy (including oil, gas and electricity) and transport sectors and remove five entities (Industrial Bank, Popular Credit Bank, Saving Bank, Agricultural Bank, and Syrian Arab Airlines) from the list of those subject to the freezing of funds and economic resources. The EU will also allow making funds and economic resources available to the Syrian Central Bank and introduce certain exemptions to the prohibition of establishing banking relations between Syrian banks and financial institutions within EU member states to allow transactions associated to the energy and transport sectors.
Last month, Syria’s first post-Assad import tenders received little interest from major oil traders because of sanctions and financial risks. Syria’s (at the time) caretaker government issued tenders to import 4.2m barrels of crude oil, as well as 100,000t of fuel oil and diesel “as soon as possible.” The tenders, which closed on 27 Jan, have not been awarded and the government was negotiating with local companies to meet the requirement, Reuters reported on 31 Jan.
On Saturday, a Syrian oil ministry spokesperson told Reuters that Kurdish-led authorities in northeast Syria have begun providing oil from local fields they manage to the central government in Damascus. A source from northeast Syria's semi-autonomous administration told Reuters that the deal involved sending 5,000 b/d of crude to a refinery in Homs. The country has two operational refineries, the 110k b/d Homs refinery and a 140k b/d plant in Banias.
Trump plans to end Chevron license in Venezuela
US President Donald Trump announced on 26 February his intention to reverse the 2022 concessions granted to Chevron for oil operations in Venezuela. While he did not explicitly reference General License 41 (GL 41), his statement strongly implies that the US Treasury Department’s authorization, which currently allows Chevron to operate in Venezuela, may be revoked as early as 1 March.
A forced Chevron exit would likely disrupt Venezuelan output significantly, as the company’s technical expertise, logistical network, and financial resources are integral to maintaining production levels.
Chevron remains the sole US oil major with operations in Venezuela, playing a critical role in sustaining the country’s crude output. Through joint ventures with Venezuelan state-controlled PDVSA, Chevron pumps over 200k b/d in the country, accounting for approximately 23% of Venezuela’s total production.
Since its issuance in November 2022, GL 41 has enabled Chevron to resume limited production in Venezuela following negotiations between the Maduro government and the opposition. This contributed to a marked increase in Venezuela’s crude exports, rising from an average of 297k b/d in 2021 to an estimated 626k b/d in 2024, per Vortexa data.
A revocation of the license would likely result in a reduction in Venezuelan crude exports. This would be particularly consequential for refiners processing its heavy crude blends. US Gulf Coast refiners, which historically have relied on Venezuelan crude, had already diversified their feedstock mix due to previous sanctions, increasing imports of Canadian heavy crude, Mexican Maya, and Middle Eastern sour grades. Supplies of some of these crude grades are already threatened by US tariffs on Mexico and Canada, which – notwithstanding a further postponement by the Trump administration - are due to start on 4 March. As of 27 February, approximately 209k b/d of Venezuelan crude was still being exported to the US, primarily on Aframax tankers.
If Chevron’s license is revoked, Venezuela’s remaining crude flows would likely shift towards Asia, with China and India as primary buyers on VLCCs. This reallocation would increase tonne-miles and freight costs, exerting downward pressure on Venezuela’s crude pricing to make it more attractive to other buyers. Additionally, a heavier reliance on intermediaries could inflate transaction costs and erode Venezuela’s earnings from its oil trade.
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