Privately operated terminals in China have accepted shipments from US-sanctioned oil tankers, suggesting that a region that is home to the country's biggest buyers of Iranian and Russian crude is finding ways to circumvent the reluctance of larger port operators.

Dongying, in the eastern province of Shandong, became a major receiving port after the state-owned Shandong Port Group sold at least one terminal to a private company, according to traders familiar with the matter. They asked Bloomberg not to be named as the information is not public.

New berths emerged

The tanker Si He, which was sanctioned on 10 January, offloaded more than 744,000 barrels of Russian ESPO crude in Dongying last week, according to traders and commodity tracking platform Kpler.

Other hotspots have also emerged, including an independently operated berth in Yangshan, south of Shanghai, and a terminal in the southern port of Huizhou, which received a shipment of Iranian oil last month.

By relying on these smaller options, so-called "teapot refineries" can continue to take discounted crude oil while protecting China's high-profile logistics companies that handle cargo and container shipments, as well as large refineries.

New concept: "teapot refineries"

China's crude oil purchases from Russia and Iran accounted for a quarter of its total imports in 2024, according to Bloomberg's calculations of official customs data.

However, Washington's tighter restrictions since late last year have made trade more difficult, forcing buyers to be creative if they want continued access to cheap oil. This development also highlights Beijing's willingness to "look the other way".