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Bond Stores For Vessels In Singapore Port
Bond Stores for Vessels in the Port of Singapore | A Cornerstone Of Maritime Logistics & Management Bonded warehouses are facilities or places where goods and supplies can be stored under a bond (compared to payment of immediate customs duties) until they have been removed.
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Oil price to rise? Millions of barrels of Iran oil piled up in China ports
International News
Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world's biggest buyer.
Two and a half months after the White House banned the purchase of Iran's oil, the nation’s crude is continuing to be sent to China where it's being put into what's known as "bonded storage," say people familiar with operations at several Chinese ports. This oil doesn't cross local customs or show up in the nation's import data and is not necessarily in breach of sanctions. And while it remains out of circulation for now, its presence is looming over the market.
The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as Organization of Petroleum Exporting Countries and allies curb production amid slowing growth in major economies. It also allows Iran to keep pumping and move its oil nearer to potential buyers.
"Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny," said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”
There could be more Iranian oil headed for China's bonded storage tanks, Bloomberg ship-tracking data show. At least ten very-large crude carriers and two smaller tankers owned by the state-run National Iranian Oil Company and its shipping arm are currently sailing toward China or idling off its coast. The vessels have a combined carrying capacity of over 20 million barrels.
The bulk of Iranian oil in China's bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn't crossed Chinese customs so it is theoretically in transit...Read More
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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Shipping lines offer time sensitive cost saving options for COVID-19
COVID-19, has changed the way this world works and is expected to continue to influence the movement of global economies, human resources, the medical field and supply chain for the foreseeable future..
As at the time of writing of this article, the global number of infected people was around 2.38+ million with 164,000+ dead which is around 6.88% of the total infected..
Several ports around the world were/are either closed or working under limited conditions with several restrictions imposed on normal port activities.. Global trade has been severely impacted and is undergoing strain as never before..
Our industry plays a highly highly pivotal role in ensuring that the flow of goods continues, especially the flow of critical and essential goods all around the world..
While this happens on one side, there are also cases where non-essential or non-critical goods are being shipped to and from various countries.. While some countries like China are reopening other countries are shutting down and there are several goods stuck in between ports due to this..
Due to this lockdown and the above mentioned reasons, many importers in many countries are facing problems to pick up their containers from the port in time..
This could be due to port congestion caused by vessel berthing delays due to limited labour or government regulations that does not allow them to pick up non-essential goods or the relevant documentation hasn’t reached the customer to secure cargo release from the shipping line..
Whatever the reasons, this a major inconvenience to all including the consignee and the ports not to mention some of the shippers who may have shipped goods based on Incoterms® that necessitate cargo delivery at destination before funds are received..
This is where some of the shipping lines have come up with some creative cost saving options..
Let’s see what these solutions are, how it will work and who can benefit from this..
As has been discussed previously, not all cargo moves from Point A to Point B directly and in a straight line..
More than 25% of the containers shipped around the world are transhipped at many of the global transhipment hubs..
Some of the lines like CMA CGM and MSC are offering customers the option to hold/store the import containers at some of these transhipment hubs in order to slow down the delivery of the imports in markets which are facing lockdown..
CMA CGM is offering this “Delay in Transit” option in 8 hubs along their global trade routes where they will store the containers for further delivery to the final destination..
North Europe – Algeciras, Piraeus ;
West Med. & Adriatic – Malta, Algeciras ;
East Med. & Black Sea – Tripoli, Malta ;
Latin America & North America – Kingston ;
Africa – Tangiers Med ; and
South East Asia & Pacific – Singapore, Busan
CMA CGM’s action follows that of the world’s 2nd largest container carrier MSC who was the first line to offer what they call “Suspension of Transit” programme..
MSC’s programme offers this temporary storage solution in 10 hubs
Freeport, Bahamas ;
Rodman Port, Panama ;
Bremerhaven, Germany ;
Klaipeda, Lithuania ;
Tekirdag Asyaport, Turkey ;
Gioia Tauro, Italy ;
Las Palmas, Canary Islands ;
Lome, Togo ;
King Abdullah Port, Saudi Arabia ; and
Busan, South Korea
Advising customers to be ready for the business that is coming back, MSC’s programme brochure said that “In our efforts to support our customers during these challenging times, we have developed a Suspension of Transit (SOT) container shipping programme to prepare for freight recovery and surging demands once the situation eases across the world.”
“The programme builds on our ongoing effort to ensure business continuity by maintaining essential services, thus contributing to the high priority transport of essential goods like foods, medical equipment and other vital supplies.” it added..
Maersk, the world’s largest container shipping line in the world is offering similar options at various origin ports in Asia..
But what was the requirement for this solution..??
Well, due to COVID-19 lockdown, many of the countries are only allowing essential-goods to be cleared and delivered to the receivers for use in fighting the pandemic and to keep certain aspects of the economy going.. Due to the nature of these cargoes, these are required on priority at various levels..
Many of the ports are working with reduced capacity to contain the impact of the pandemic.. Therefore, many non-essential goods like clothing, auto parts and some of the other retail goods have taken a back seat and these companies are not allowed to operate during the lockdown..
Because of this, these non-essential goods customers may not be able to take delivery of the containers from the ports, terminals or depots leading to severe backlogs in and around the ports of discharge which could impact on the movement of essential goods which are required..
How will this cost saving option work..??
The lines are clear on how this solution will work.. In simple terms
BCOs decide if they require this option ;
If they require this option and if their cargo is being transhipped at one of the above mentioned hubs, they can send a request to the line at the time of the booking stipulating the port of discharge ;
The line will then hold the containers at the required hub ;
When the customer at POD is ready to receive it, they can send a message to the line to release the hold ;
Container(s) will be shipped to the POD as normal once all the charges at the hub has been settled
So what is the benefit and who benefits from these cost saving options??
The main beneficiaries of such programmes could be the BCOs (either exporter or importer depending on their terms of shipment) and also NVOCCs or Consolidators..
Ports of Discharge could also benefit from these options because this will help avoid the congestion caused due to the non-movement of non-essential goods..
The customer requesting this option will be responsible for the cost.. But as per the lines, these programmes allows the customers substantial cost savings and control over storage costs instead of the consignee facing unknown and uncontrolled costs at the POD such as port storage, demurrage, detention and warehousing costs..
CMA CGM’s brochure which explains this option says “In today’s market, you need utmost flexibility to ensure your supply chain easily adapts to changing conditions. With our Delay in Transit (DIT) solution, you can request temporary retention of your goods at a dedicated port/hub until your customer is ready for the cargo to continue to the POD. This enables you to control storage costs.”
This option is seen as a good one for the BCOs because it helps the customers avoid demurrage and detention charges at POD as the cargo is still deemed to be in transit and they will be liable only for the storage costs at the storage hubs..
Storage charges at transhipment ports may be lower than that of the final ports of destination as generally the transhipment hubs have larger yard space than regular ports..
Conclusion
For all the troubles it might have caused/causing the world, COVID-19 seems to have brought about a new era of meaningful communication, interaction and cooperation among all role players in the supply chain..
Ports are being lenient in their approach to the situation that has gripped the world, shipping lines have announced reduced demurrage and detention charges for the containers and customers affected by the delays caused by COVID-19, carriers and terminal operators are offering to share their unused storage space for customers..
In some countries, Customs are relaxing the requirement of moving uncleared containers only to customs bonded facilities as they have run out of space due to many uncleared containers sitting in these facilities..
These and programmes such as above is proof that working together, we as an industry can protect the interests of many, save costs while still keeping the engine of global trade running..
Well done to us thus far and may this cooperation continue way after COVID-19..
The post Shipping lines offer time sensitive cost saving options for COVID-19 appeared first on Shipping and Freight Resource.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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Millions of Barrels of Iranian Oil Are Piled Up in China’s Ports
(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”See also: Iranian Oil Tanker Daniel Enters Chinese Port: Ship TrackingThere could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.Nobody replied to a faxed inquiry to China’s General Administration of Customs.Lack of ClarityThe build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.See also: China Buying Iran LPG Despite Sanctions, Ship-Tracking ShowsChina received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”(Updates with mention of June trade data in 12th paragraph.)\--With assistance from Nick Wadhams.To contact Bloomberg News staff for this story: Serene Cheong in Singapore at [email protected];Sarah Chen in Beijing at [email protected];Alfred Cang in Singapore at [email protected] contact the editors responsible for this story: Serene Cheong at [email protected], Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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