China significantly reduces imports of Russian oil due to sanction threats
Chinese state-owned refineries have reduced imports of Russian ESPO crude oil due to the risks of secondary sanctions from the US and the EU.
As reported by Bloomberg, citing data from the analytical firm Rystad Energy AS, this year’s Chinese import of Russian seaborne crude oil could decrease by 500,000 to 800,000 barrels a day, which is two-thirds of the normal level. This decision by Chinese companies followed the imposition of sanctions by Washington against Russian companies “Rosneft” and “Lukoil”.
It is noted that the restrictions affected the Chinese oil terminal Rizhao, which processed about 10% of the crude oil imports to China. This also influenced flows from Iran, which may decrease by 200,000 to 400,000 barrels per day, or 30%. Even private Chinese refineries are showing caution, avoiding risky purchases of Russian oil after the company Shandong Yulong Petrochemical Co. was blacklisted by the EU and the UK.
The reduction in imports is occurring amid similar actions by Indian refineries, indicating the success of Western efforts to limit Kremlin financing. However, Bloomberg warns about the possibility of supply resumption through the black market, particularly in ports like Dongjiakou in Shandong province.
| Indicator | Volume (thousands of barrels per day) | Change, % |
|---|---|---|
| Import of Russian oil | 500-800 | -66% |
| Import of Iranian oil | 200-400 | -30% |
