Chinese refiners, from state-owned giants to private “teapots,” are in full retreat from Russian oil. Sinopec and PetroChina are reportedly canceling Russian cargoes, a direct reaction to new US sanctions on producers Rosneft and Lukoil.
The private sector is equally spooked. “Teapot” refiners are shunning Russian crude, terrified by the precedent set by the UK/EU blacklisting of Yulong Petrochemical.
This widespread “buyers’ strike” has hit Moscow hard. It has caused a plunge in ESPO crude prices and is estimated to affect 400,000 barrels a day, furthering the Western policy goal of cutting Russia’s war funding.
This market chaos is unfolding in a diplomatic vacuum. A recent summit between Donald Trump and Xi Jinping was conspicuously silent on the oil issue, leaving refiners guessing about the political red lines.
To make matters worse, many teapot refiners face a domestic hurdle: they are running low on crude import quotas, which limits their purchasing power for the rest of the year.