Sinopec reroutes crude, adjusts refinery runs after US sanctions on Rizhao terminal: sources

China's state-owned oil company Sinopec is undertaking a logistic overhaul, rerouting crude supplies and adjusting refinery operations to mitigate the feedstock supply disruptions from the Rizhao Shihua Crude Oil Terminal due to the recent US sanctions, refinery sources told Platts, part of S&P Global Energy over Oct. 13-15.

Market analysts estimated the shutdown of the three VLCC terminals at Rizhao Shihua would lead to 180,000-250,000 b/d of throughput cut at the affected Sinopec refineries in October, given that the logistic hub handled over 800,000 b/d of crude imports for the state-owned refining giant in 2024.

Sinopec aimed to process 5.19 million b/d of crude in the second half of 2025, rising from the throughput of 4.87 million b/d in H1, according to its interim report.

The Rizhao-Yizheng pipeline connects about 1.35 million b/d of Sinopec refining capacity along the Yangtze River, including Jinling Petrochemical, Yangzi Petrochemical, Wuhan Petrochemical, Jiujiang Petrochemical, Hunan Petrochemical and Jingmen Petrochemical. The 200,000-b/d Luoyang Petrochemical facility is the leading Sinopec refinery served by the Rizhao-Dongming pipeline, according to the refining sources.

The impact on individual refineries varies based on their reliance on the sanctioned terminal.

Some of these refineries have cut by up to 20% of their utilization as there was no alternative solution to bring in feedstocks, such as the 170,000-b/d Wuhan Petrochemical in Hubei province and the 160,000-b/d Jiujiang Petrochemical in Jiangxi province, according to sources close to the plants.

Meanwhile, Sinopec's 420,000-b/d Jinling Petrochemical in Jiangsu province has been less affected because the refinery also connects to the oil terminals in Ningbo and Zhoushan in Zhejiang province via pipelines.

The refinery targets to operate at about 79% of its capacity, a decrease of three percentage points from the previous month despite the shutdown in Rizhao Shihua terminals, according to a refinery source who requested anonymity.

Sinopec has been diverting crude cargoes which were originally destined for Rizhao to alternative ports in East and South China, according to four refining sources in different regions with knowledge of the matter.

"Some of the diverted barrels are sent to the affected refineries with the existing alternative pipelines," said a refining source with Sinopec.

The cargoes to South China will be processed by refineries near the new discharge points. Subsequently, the refined products will be shipped to Hunan, Jiangxi and Hubei provinces to cover the oil product supply shortfall, according to the four sources with knowledge the matter.

Sinopec's 200,000-b/d Zhongke Petrochemical in Guangdong province is one of the refineries to raise throughput to compensate for the reduction of its peers. One of the refining sources said that the plant has lifted the utilization to 100% from the original target of 90%.

However, the neighboring 264,000 b/d Guangzhou Petrochemical would continue with its maintenance plan to shut in late October, according to a source close to the plant.

Sinopec did not respond to a request for comment.

Sinopec Kantons Holdings said the inclusion of Rizhao Shihua on the US SDN List may restrict its related businesses, which may in turn have corresponding impacts on its overall results, according to a company filing to Hong Kong Stock Exchange on Oct. 13

Sinopec Kantons is Sinopec's logistic and storage arm, holding a 50% stake in the sanctioned Rizhao terminal and operating several other key oil and gas logistics facilities across China.