Russia’s oil lifeline to China has been slashed by an estimated 400,000 barrels a day as new sanctions scare off buyers. This “buyers’ strike,” reported by Rystad Energy AS, represents up to 45% of China’s Russian imports.
The retreat is led by China’s state-owned giants, Sinopec and PetroChina, who are canceling cargoes. Their fear is linked to new US sanctions on Russian producers Rosneft and Lukoil.
The fear is just as high in the private sector. “Teapot” refiners are holding off on purchases, spooked by the recent blacklisting of a fellow Chinese firm, Shandong Yulong Petrochemical Co., by the UK and EU. This has caused prices for Russian ESPO crude to plunge.
Russia had cemented itself as China’s top supplier by offering steep discounts after the Ukraine invasion. The US and its allies are now escalating their campaign, targeting customers to cut off Moscow’s oil revenues and pressure it to end the war.
As China, the world’s top crude importer, looks for alternatives, other suppliers like the US could benefit. This follows a recent trade truce between leaders Trump and Xi. However, the blacklisted Yulong is now buying more Russian oil, as it has no other options.
