A great retreat from Russian oil is happening in China. State-owned firms Sinopec and PetroChina are canceling shipments, and private “teapot” refiners are shunning the trade.
The cause is a one-two punch of sanctions and fear. The US has targeted Russian producers Rosneft and Lukoil. Meanwhile, the UK/EU blacklisting of Yulong Petrochemical has terrified private operators.
This “buyers’ strike” has achieved a key Western policy goal: hitting Russia’s finances. Prices for ESPO crude have plummeted, and a significant 400,000 barrels a day of flow is impacted.
The situation is exacerbated by a lack of diplomatic clarity. A recent Trump-Xi summit produced a “muddle,” with public statements silent on the critical oil issue.
This leaves refiners guessing. As China, the world’s top importer, looks for new supplies, the US could benefit, but the market remains fraught with uncertainty.
