Chinese Refineries Boycott Almost Half Of Russian Oil Supplies

Beijing doesn't want to get hit with secondary sanctions.

Chinese refineries are curtailing their imports of Russian oil due to the sanctions imposed by the Donald Trump administration, under which Rosneft and Lukoil have fallen.

As Bloomberg reports citing traders, state-owned Sinopec and PetroChina have already canceled a number of crude purchases from Russia and continue to stay on the sidelines. They have been joined by small private refineries that fear being hit by sanctions, as has already happened with Shandong Yulong Petrochemical, which is blacklisted by Britain and the European Union.

"The buyers' strike" has affected nearly 45% of Russian oil exports to China, according to Rystad Energy. The Far Eastern ESPO grade has fallen under the "boycott", causing its prices to fall: oil companies are offering it at a discount of $0.5 per barrel to Brent, although in early October they demanded a premium of $1.

Because of U.S. sanctions, which affected two of Russia's largest oil companies, a number of Indian refineries, including Mangalore Refinery and Petrochemicals, HPCL-Mittal Energy and Reliance Industries, have suspended purchases of Russian oil. However, the country's largest refiner Indian Oil, after a short pause, resumed imports of Urals grade from companies not affected by the sanctions.

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