The US government has lifted sanctions against a tanker unit of Cosco, China’s state-run shipping conglomerate, partially reversing its punishment on the company for transporting Iranian oil.
The decision comes after China and US reached a phase one agreement of a broader trade pact in January.
According to the Treasury Department of the US, it has removed sanctions against Cosco Shipping Tanker (Dalian), while it continues to blacklist another Cosco unit Cosco Shipping Tanker (Dalian) Seaman & Ship Management.
The US imposed sanctions on six Chinese companies including subsidiaries of Cosco and Kunlun, as well as oil trader Concord Petroleum, in September. The sanctions caused a stir in VLCC spot market with a large number of Cosco tankers banned from trading.The Treasury Department had twice issued waivers to allow companies to wind down dealings with the Cosco units.
The lifting of sanctions will bring back about 2-3% of the global crude tanker fleet to rejoin global trading.
China is the world’s only major importer of Iranian oil. Chinese customs data shows that China imported 14.77m tonnes of Iranian oil in 2019.
Result of COSCO fleet return on tanker shares
— calvinfroedge (@calvinfroedge) January 31, 2020