- Chinese state-owned oil majors, including Sinopec, have halted some purchases of Russian seaborne crude following new U.S. sanctions on Rosneft and Lukoil.
- The restrictions have disrupted oil flows and pushed Brent crude prices higher, reflecting growing geopolitical strain in energy markets.
- While seaborne imports may decline, China’s pipeline deliveries from Russia are expected to continue due to non-Western payment arrangements.
- The sanctions are likely to affect Russian exports to both China and India, prompting refiners to seek alternative crude supplies.
Chinese state-owned oil companies, including Sinopec, have reportedly suspended some seaborne crude purchases from Russia following new U.S. sanctions against Rosneft PJSC and Lukoil PJSC. The restrictions, which were also echoed by the European Union, have unsettled the global oil market and prompted Chinese firms to reassess their exposure. Brent crude futures surged in response to the sanctions, with weekly gains exceeding 7%. According to a report by gCaptain, the move underscores growing geopolitical tension in global energy trade.
Chinese Buyers Reassess Oil Strategy Amid U.S. Measures
Major state-owned Chinese refiners such as Sinopec, China Zhenhua Oil Co., and Sinochem Group have paused some spot cargo acquisitions, particularly ESPO-grade crude from Russia’s Far East. While China’s Foreign Ministry criticized the U.S. action as unilateral, officials signaled that Beijing is closely evaluating its options. President Trump is expected to discuss the issue with Chinese President Xi Jinping during their upcoming meeting in South Korea, potentially addressing both oil trade and wider economic cooperation. China’s seaborne imports from Russia typically exceed 400,000 barrels per day, representing around 40% of total Russian shipments by sea. Although these flows may decline, pipeline deliveries are likely to continue due to pre-existing loan-based payment mechanisms that bypass Western financial systems.
Broader Impact on Global Oil Flows and Market Outlook
The sanctions have not only affected China but are also expected to disrupt Russian crude flows to India, another major importer. Analysts view the measures as a turning point in Western policy, shifting from price caps to direct supply restrictions aimed at increasing economic pressure on Moscow. Market observers note that state-linked Chinese refiners could reduce runs or seek alternative supplies from the Middle East and West Africa, while private refiners may remain largely unaffected. Despite the volatility, Brent futures stabilized near $66 per barrel by Friday, though prices remain 12% lower than earlier in the year amid concerns over excess output from OPEC+ nations. Russian President Vladimir Putin acknowledged potential challenges from the sanctions but emphasized that the broader economy would remain resilient.
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Source: gCaptain
