Some China-Bound Ships Carrying Oil Canceled on Port Fees
Beijing Retaliates as Both Nations Levy Port Fees Starting Oct. 14
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Oil tanker rates spiked the most in years and some vessel bookings faced cancellations as trade tensions between the world’s two largest economies escalated afresh.
A handful of oil tankers had provisional bookings to deliver cargoes to Chinese ports canceled Oct. 10, according to several officials involved in the market who asked not to be identified discussing private information. The moves came after China, the world’s largest oil importer, said it would levy charges on U.S. vessels.
Chartering costs for supertankers jumped the most since 2020 as the fees compounded the impacts of U.S. sanctions imposed Oct. 9 on a major Chinese import terminal. Earnings for bulk commodity carriers hauling coal and iron ore also climbed after Beijing’s announcement, with vessel owners and charterers still hunting for more details on the how the policy will play out in practice.
China announced Oct. 10 that it would impose charges on U.S. ships inretaliationfor similar measures soon to be levied as part of the Trump administration’s efforts to kick start America’s shipbuilding industry. Within hours, Trump countered with threats of newtariffsagainst Beijing.
China's Ministry of Transport announced Friday that the country will charge special port fees on ships owned or operated by U.S. enterprises, organizations and individuals from Oct. 14. — China Xinhua News (@XHNews)
The Chinese levies would begin at 400 yuan ($56) per ton, translating to about $6.2 million in additional fees for a giant supertanker per port visit, according to calculations by Bloomberg.
“The impact as of now is significant,” Fearnley Securities analysts including Fredrik Dybwad wrote in a note. “As the numbers are significant, this should create inefficiencies and likely lead to higher rates.”
Freight derivatives contracts surged too, rallying almost 25% for Middle East-to-China voyages since Oct. 9, people involved in the market said.
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The levies by China take effect from Oct. 14, mirroring those implemented by Washington on Chinese vessels, and will increase each year, climbing almost threefold by April 2028.
While many of the world’s biggest oil tanker operators are based outside the U.S., several have U.S. listings and major U.S. shareholders.
If American entities directly or indirectly hold 25% or more of the equity in terms of voting rights or board seats of the companies operating vessels, they will be considered American. Ships are also considered as such if they fly the U.S. flag or are built in America.
“This new China fee framework is meaningfully impactful as it would affect publicly-listed companies, especially those in the U.S. markets with 25% or more holdings from U.S.-domiciled investment funds,” Jefferies analysts including Omar Nokta wrote in a note.
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