China Scales Back Purchases Of Russian Oil Following New US Sanctions; Report

Chinese state oil companies, including PetroChina and Sinopec, have suspended seaborne Russian oil purchases due to new US sanctions on Rosneft and Lukoil. The US Treasury imposed these sanctions, citing Russia's lack of commitment to ending the Ukraine war, aiming to pressure Russia's energy sector. These Chinese firms fear potential secondary sanctions for dealing with sanctioned Russian entities. While state firms pause, smaller Chinese refiners may continue buying Russian oil after assessing the sanctions' impact. Pipeline oil purchases from Russia to China, amounting to approximately 900,000 barrels per day, are expected to remain unaffected. India, another major Russian oil customer, is also anticipated to significantly reduce crude imports from Moscow. The decline in demand from China and India may strain Russia's oil revenues and increase global oil prices. Both China and India will likely seek alternative oil supplies from West Asia, Africa, and Latin America. The US also threatens secondary sanctions on financial institutions dealing with Rosneft and Lukoil. Additionally, some West Asian and Canadian suppliers have halted sales to China's Yulong Petrochemical after UK sanctions, potentially driving Yulong to buy more Russian crude.