Bloomberg: Chinese refiners refusing to buy Russian oil after Western sanctions

Chinese refiners have begun refusing to buy Russian oil after the United States and other Western countries imposed sanctions on major Russian producers and some of their clients.

Following last month’s U.S. sanctions against Rosneft and Lukoil, state-owned companies Sinopec and PetroChina have already cancelled several shipments, Caliber.Az reports, citing Bloomberg.

Smaller private refiners have also paused purchases, fearing penalties similar to those imposed on Shandong Yulong Petrochemical Co., which was recently sanctioned by the United Kingdom and the European Union.

The ESPO crude grade has been hit hardest, with prices plunging sharply. According to Rystad Energy AS, about 400,000 barrels per day — nearly 45 percent of Russia’s exports to China — have been affected.

Russia has solidified its position as China’s leading foreign oil supplier, largely due to steep discounts driven by sanctions imposed following the invasion of Ukraine.

The United States and its allies are now intensifying those restrictions — targeting both Russian producers and their customers — in an effort to curb Moscow’s oil revenues and pressure it to end the war.

As the world’s largest crude importer, China may have to seek more oil elsewhere if its access to Russian supplies narrows, creating new opportunities for other exporters.

Among them is the United States, which recently reached a landmark trade truce with Beijing during talks between Presidents Donald Trump and Xi Jinping.

Still, the sanctions have not entirely shut Moscow out of the market: blacklisted Yulong, facing cancelled shipments from Western suppliers, has increasingly turned to Russian crude as one of its few remaining options.

By Jeyhun Aghazada