US Tariffs Drive Oil Traders Away from Chinese Vessels in Favor of American Routes

By Serene Cheong, Alex Longley, and Weilun Soon

April 3, 2025 (Bloomberg) – Oil traders are steering clear of ships built in China when booking vessels for US ports.This shift comes on the heels of President Donald Trump’s proposal to impose significant fees on these ships as part of an effort to boost American shipbuilding.

According to industry insiders, charterers looking for vessels to transport cargoes at US terminals are specifically requesting alternatives that aren’t constructed in Chinese shipyards. With options like South Korean-built tankers available, many traders are opting for those instead.

Interestingly, this trend is already affecting pricing. As an example, the Olympic Sky—a tanker built in Shanghai—was recently chartered for a route from the US Gulf Coast to the UK Continent at a rate of 167 worldscale points. In contrast,a South Korean vessel named Rivera was booked for the same journey at a higher rate of 185 worldscale points just days later.

While Trump’s proposal is still under discussion and hasn’t been finalized yet, it’s clear that potential fees—rumored to be around $1 million each time a Chinese-operated or constructed ship docks at a US port—are causing ripples throughout the market. Poten & Partners Inc., a shipping consultancy firm, noted that if these rules come into effect as suggested, many tankers would find it unprofitable to operate within US trade routes.

Moreover, companies seeking long-term charters have begun excluding chinese ships from their searches altogether. some shipowners have even modified leasing agreements so they can pass any new levies onto their clients who rent their vessels. The market for second-hand bulk carriers from China has also seen stagnation lately; sales have plummeted while new orders at Chinese yards continue to decline.

China has rapidly ascended as a powerhouse in global shipbuilding over recent years. Even though South Korea remains home to more operational oil tankers worldwide than any other nation, data from Clarksons Research Services Ltd.—the largest shipbroker globally—indicates that over 70% of all tankers currently being constructed are taking shape in Chinese facilities.

In summary: As geopolitical tensions rise and trade policies evolve under current leaderships worldwide—including efforts by various nations aiming for self-sufficiency—the dynamics within maritime logistics continue shifting dramatically. it will be engaging to see how this situation unfolds and what further implications it may hold not only for oil trading but also across broader international shipping practices moving forward.