China’s Oil Giants Halt Russian Crude Imports After U.S. Sanctions

 

China’s top state-owned oil companies have suspended seaborne imports of Russian crude following new U.S. sanctions on Rosneft and Lukoil, two of Moscow’s largest oil producers. The move, confirmed by multiple trade sources, highlights growing caution among Beijing’s energy giants amid tightening Western restrictions linked to Russia’s invasion of Ukraine.

 

PetroChina, Sinopec, CNOOC, and Zhenhua Oil are temporarily halting spot purchases of Russian oil to avoid potential penalties. The suspension comes as India—currently the largest buyer of Russian seaborne crude—also plans to scale back imports in compliance with the latest U.S. measures.

 

China typically imports around 1.4 million barrels of Russian oil per day by sea, though most volumes are handled by independent “teapot” refiners. Estimates suggest that state firms account for between 250,000 and 500,000 barrels per day. Despite the seaborne halt, pipeline deliveries—roughly 900,000 barrels daily to PetroChina—are expected to continue unaffected.

 

The combined reduction from China and India could sharply cut Moscow’s oil revenues and increase demand for non-sanctioned crude from the Middle East, Africa, and Latin America. Analysts say the pullback may push global prices higher as buyers compete for limited alternative supplies.

 

Prior to the sanctions, November-loading ESPO crude had been trading at a $1.70 premium to ICE Brent; offers have since fallen to about $1. Traders say independent refiners may resume limited purchases once the full impact of sanctions becomes clearer.

 

Key Takeaways

• China’s state oil firms suspend seaborne Russian crude imports after U.S. sanctions on Rosneft and Lukoil.

• India also plans to slash Russian oil buys, deepening the impact on Moscow’s export revenues.

• The supply gap is likely to lift global oil prices as buyers turn to other regions.

 

Adapted from: Reuters

Effective.

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