Chinese refineries began to actively purchase raw materials to avoid disruption of supplies due to sanctions
China’s state-owned oil corporations and large private oil refiners are actively increasing purchases of oil from the Middle East and other regions in response to risks associated with increased sanctions against Russia and Iran. About this informs Bloomberg.
Cnooc, Shandong Yulong Petrochemical Co and Jiangsu Eastern Shenghong Co are actively seeking opportunities to buy raw materials with immediate delivery, traders said. Particular attention is paid to supplies for February, buying oil of various grades, in particular from the regions of the Middle East, Africa and America.
The activity is due to concerns that smaller private refiners may face limited access to cheap Russian and Iranian oil. This will force them to reduce production volumes or even stop producing fuel, which will create risks for the market.
In such a case, large state-owned refiners will likely be forced to make up for the shortfall to ensure stable supplies of fuel, particularly diesel. It will also allow them to increase their market share and strengthen the country’s energy security, which is one of Beijing’s top priorities.
We will remind that the new US sanctions have already affected more than 180 tankers and several key Russian oil-producing companies. These measures have begun to affect the Asian oil market, where buyers, carriers and ports are struggling to cope with the new challenges.
