News wire — China’s state-owned oil companies are scaling back purchases of Russian crude due to concerns over U.S. sanctions, Reuters reported on March 14, citing industry sources.
Chinese firms have avoided buying oil from suppliers directly hit by sanctions. “They are taking a break for now while contemplating if there are ways to work around,” a source told Reuters.
Russia remains China’s largest crude supplier, accounting for 20% of its total imports. While Beijing has strengthened economic ties with Moscow since the full-scale invasion of Ukraine, it has repeatedly denied allegations of directly supporting Russia’s war effort.
Despite China’s deepening trade relationship with Russia, growing economic pressure has led many Chinese financial institutions to scale back dealings with Moscow, fearing secondary U.S. sanctions.
China’s state-run Sinopec and Zhenhua Oil have halted supplies entirely, while PetroChina and CNOOC have continued shipments in March but with reduced volumes, according to sources familiar with the matter.
A Sinopec source said the company stopped purchasing Russian oil as it conducted additional checks on compliance with U.S. sanctions and awaits a “clear picture” of ongoing U.S.-Russia negotiations on ending the war in Ukraine. The company may resume supplies if talks lead to an easing or lifting of sanctions.
PetroChina, a key buyer of Russia’s ESPO (BCTO) crude from Russia’s state energy company Rosneft, continued offshore shipments in March but at lower volumes, sources told Reuters. CNOOC, another major buyer, also reduced its shipments.
In one of his final acts in office, former U.S. President Joe Biden imposed sweeping sweeping sanctions on Russia’s energy sector on Jan. 10, targeting Gazprom Neft and Surgutneftegaz; over 180 oil tankers transporting crude from Russia, Iran, and Venezuela; and insurance firms involved in Russian oil logistics.
