China is afraid of US sanctions. Companies are suspending purchases of Russian oil

Chinese state oil companies have suspended purchases of Russian oil transported by sea in response to new sanctions imposed by the US on Russian companies Rosneft and Lukoil, Reuters reported on Thursday, according to sources. This is a blow to Moscow, whose revenues from the sale of raw materials may decline significantly.

Multiple trade sources told Reuters on Thursday that China's state-owned oil giants such as PetroChina, Sinopec, CNOOC and Zhenhua Oil had halted purchases of Russian crude “at least in the short term” for fear of sanctions.

This move coincided with the announcements of refineries in India, which is the world's largest recipient of Russian oil transported from the sea. They also intend to sharply limit imports from Russia to comply with American restrictions.

China imports about 1.4 million barrels of Russian oil per day by sea. The share of state-owned companies in these purchases is estimated differently – the analytical company Vortexa Analytics puts it at less than PLN 250,000. barrels per day, while the consulting company Energy Aspects says about 500 thousand. barrels per day. In total, China imports about 1.4 million Russian crude oil a day by sea, with most of it going to independent refineries. Additionally, approximately 900 thousand barrels of Russian oil are delivered by pipeline to PetroChina and – according to traders – sanctions will probably have little impact on this segment.

A sharp slump in demand from Russia's two largest customers “will put a heavy burden on Moscow's oil revenues,” say traders quoted by Reuters.

They indicate that India and China will probably now turn to other suppliers, which will result in “an increase in oil prices from the Middle East, Africa and Latin America.” (PAP)

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