A Sinopec petrol station in Hong Kong, China. Photo: EPA / Alex Hofford
Chinese oil refiners are cancelling contracts with Russian suppliers following the implementation of US sanctions against energy giants Lukoil and Rosneft, Bloomberg reported on Sunday.
Both major state-owned refiners and smaller private operators have halted seaborne imports from Russia’s Far East to avoid noncompliance, Bloomberg reported, after the announcement of fresh US sanctions on Russia’s two largest oil companies last week.
The world’s largest importer of crude oil, China’s purchases of Russian oil have surged in recent years, jumping from €35.2 billion in 2021 to €54.4 billion in 2024, according to Trading Economics.
State-controlled entities such as Sinopec and PetroChina have cancelled contracts with Russian suppliers, likely in an effort to avoid being blacklisted by the United States.
The UK government’s decision last month to sanction the Belhai liquefied natural gas terminal and Shandong Yulong Petrochemicals Company for continuing to accept Russian crude oil imports in breach of US sanctions has introduced a more tangible risk to the sector. Should similar measures be adopted by more influential actors such as the EU or the United States, the consequences for Chinese firms could be significantly more severe.
The new US sanctions on Russian oil exports are already having an impact on the countries that buy the largest amount of Russian crude, with a number of Indian refineries reportedly suspending the purchase of Russian raw materials and Turkish refiners diversifying their sources of crude oil imports beyond Russia to markets such as Iraq and Kazakhstan.
