Chinese refineries began to reduce purchases of Russian oil after US sanctions: Bloomberg
Chinese refiners have begun to cut purchases of Russian oil after the United States and other Western powers imposed new sanctions on Russia’s top producers and some of their customers, Bloomberg reported.
State-owned companies Sinopec and PetroChina have already cut back on several shipments after the United States added Rosneft and Lukoil to sanctions last month. Even smaller private refiners are temporarily halting purchases, fearing they could be hit with sanctions. This is what happened to Shandong Yulong Petrochemical Co., which was recently sanctioned by the UK and the European Union.
Russian ESPO crude oil has been hit the hardest, with its price plummeting. Rystad Energy AS estimates that the cut in supplies is around 400,000 barrels per day, or about 45% of Russian oil exports to China.
Russia has previously maintained its position as China’s main oil supplier thanks to significant discounts imposed after sanctions over its invasion of Ukraine. But the US and its allies are now stepping up pressure, expanding sanctions not only on Russian producers but also on their buyers. The aim is to reduce Moscow’s oil revenues and limit its ability to finance a war.
With China remaining the world’s largest importer of crude, the reduction in Russian purchases could open up new opportunities for other exporters, including the United States. Last week, Washington and Beijing agreed to a trade truce during a meeting between US President Donald Trump and Chinese leader Xi Jinping.
