Chinese oil refiners are cutting back on purchases of Russian crude after Washington and its allies expanded sanctions against Moscow’s top energy producers and some of their customers.
State-owned companies, including Sinopec and PetroChina, have reportedly canceled Russian cargoes in response to US sanctions imposed last month on Rosneft and Lukoil, traders said. Smaller independent refiners, known as “teapots,” are also holding off amid fears of facing similar penalties to those recently placed on Shandong Yulong Petrochemical by the UK and EU.
The pullback has hit Russia’s ESPO grade particularly hard, with prices plunging and an estimated 400,000 barrels per day—about 45% of China’s Russian oil imports—affected, according to consultancy Rystad Energy.
The move comes as the US and its allies intensify efforts to squeeze Moscow’s oil revenues and starve its war economy. Russia has become China’s largest oil supplier due to heavy discounts following Western sanctions, but the latest restrictions could redirect Chinese demand to other producers, including the United States, which recently reached a trade truce with Beijing.
Rystad noted that Chinese teapot refiners are also constrained by limited import quotas, making further Russian purchases unlikely this year even if they were prepared to defy sanctions.
