Sanctions on Rosneft and Lukoil will only bring Russia closer to China

Despite the increase in oil prices as a result of American sanctions imposed on Russian oil companies, fuel prices will not increase overnight – e-petrol.pl analyst Jakub Bogucki told PAP. He pointed out that American sanctions will make Russia more dependent on China.

The US Ministry of Finance announced on Wednesday the imposition of sanctions on the Russian oil companies Rosneft and Lukoil and their subsidiaries.

Jakub Bogucki, an analyst of the fuel market at e-petrol.pl, points out that global crude oil prices have “soared up” again – the price of the raw material increased by about 3% after the United States imposed sanctions on Rosneft and Lukoil. He recalled that sanctions were also imposed by Great Britain, and the European Union adopted the 19th sanctions package, including, among others: ban on the import of Russian LNG. – Markets reacted immediately – fears about the limited supply of oil from Russia restored nervousness on commodity exchanges – the analyst noted on Thursday in a comment for PAP.

He noted that Poland has become independent from Russian oil and remains an active importer of raw materials from other directions. – Therefore, global price fluctuations still have an indirect impact on the domestic market – he added.

According to Bogucki, a violent reaction to sanctions against indicators at fuel dispensers should not be expected. – Prices at gas stations do not increase overnight – he emphasized.

Oil reacts quickly, but refinery wholesale price lists need a few days to reflect the new realities, and only then are they translated into retail. As a result, Polish gas stations will still be calm, and any price increases – if they occur at all – will only take place after some time, when the market is sure that the current price jump is not just a temporary reaction to the sanctions turmoil – predicts the analyst.

He pointed out that the key export direction for Russian oil is currently Asia. He added that as a result of US sanctions on Russian oil companies, India has started reviewing import contracts to avoid violating sanctions. – Even the private giant Reliance Industries, the largest Indian importer of Russian oil, announced that its purchases would be adjusted to the government's guidelines – this says a lot about the concerns and action plans of Indian recipients – said Bogucki.

The analyst also said that China's raw material reserves are already growing, and Beijing is increasing its strategic stocks “just in case.” – According to my suspicions, China will do everything to maintain stable supplies of cheap Russian oil – said Bogucki.

When asked how strongly Russia would feel the sanctions, the analyst replied that “officially – probably not at all.” – Traditionally, the Kremlin will not admit to losses, but the loss of a recipient such as India is painful for Moscow. Especially since the pool of potential buyers of Russian oil is systematically shrinking – which means an increasing dependence on China, which can dictate its own conditions, which are not always favorable to Russia – said an e-petrol.pl analyst.

Indian state refiners said on Thursday they were reviewing their purchases of Russian crude to ensure supplies did not come directly from Rosneft and Lukoil after the US administration imposed sanctions on them.

The BBC website recently recalled that imports of Russian crude oil to India increased rapidly from 4 million tonnes in 2021-2022 to over 87 million tonnes in 2024-2025. The increase was due to discounts offered by Russia following Western sanctions, which made its crude more attractive to Indian refineries.

The authorities in Beijing oppose the “illegal, unilateral sanctions” that the European Union plans to apply to Chinese entities as part of the 19th package of sanctions against Russia in connection with its aggression against Ukraine, said Guo Jiakun, spokesman for the Chinese Ministry of Foreign Affairs, on Thursday. State media accused the EU of “blindly” following the US. The spokesman also said China “will take all necessary measures to resolutely defend its legitimate rights and interests.” (PAP)

ab/ mick/ ktl/