Chinese State oil companies avoid Russian oil this month, with two importers stopping the while of while the other two increases the volume again because they judge compliance after the new US sanctions against Moscow, said many trading sources.
Russian oil supplies for Top India and Chinese buyers fell sharply after January 10 sanctions by former Biden government who targeted Russian producer Gazprom NEFT (SIBN.MM), opening a new tab and hegutneftegaz (SNGS.MM), opening a new tab and insurance and more than 100 ships for restrictions on oil income.
While Russian shipments to the two Asian countries have recovered after more tankers who were not approved joined in trade, Sinopec managed by the Chinese government (600028.SS), opened a new tab and Zhenhua oil stopped the purchase of Russian oil which contained March because of concerns about dealing with approved companies, sources with knowledge of this issue.
The purchase of scale by Chinese players has burdened Russian oil prices, eating Moscow’s income and put additional pressure on Russia ahead of the possibility of a ceasefire with Ukraine.
State oil sources based in Beijing said his company stopped the Russian oil agreement because he made more compliance checks and was waiting for a “clear picture” on the possibility of Russian-US agreement to end the Ukraine war.
The company will continue the purchase if the conversation leads to the US to make it easier or lift sanctions on Russian oil, the person added, refusing to be named or to identify their company because they are not authorized to talk to the media.
Surgutneftegaz and Gazprom NEFT contributed about one third of sea delivery from Russia’s main class, Espo Blend. Two exports around 1.2 million metric tons to China per month are combined, or around 300,000 barrels per day (BPD).
A trade executive who is close to Russian suppliers who regularly deal with Chinese buyers said the companies avoid oil produced by recently approved companies.
“They rested for now while pondering if there is a way to work,” added the executive.
China said it was against unilateral sanctions.
Sinopec oil and Zhenhua did not respond to requests for comments.
Gazprom NEFT and Surgutneftegaz did not reply to Reuters’ comments requests.
Independent Penitaman has stepped on to take concessions, supporting prices for Russian ESPO mixtures at a price of $ 2.50- $ 3 per premium barrel for Ice Brent with a base delivered for March loading cargo, the executive said and two other traders.
A newer transaction from April loading cargo is likely to be carried out with a premium above $ 2 per barrel, the trader said. Different prices for different producers and oil ships, added them.
Apart from the western restriction layer aimed at curbing Moscow’s income because of its war on Ukraine, Chinese state companies have become the main client of Russian oil, buying about half of Russian shipping to China, or around 1.3 million BPD, with independent lectures taking the rest.
Russia so far is the largest oil supplier in China, which is 20% of the import of crude oil in the top importer of the world.
Lower volume
Petrochina (601857.ss), opening a new tab, an old eSPO buyer from Top Russian producer Rosneft (Rosn.MM), opening a new tab, however, followed by a purchase at sea in March but at a lower volume, two sources said.
CNOOC, which regularly buys and trades Russian oil, has also reduced the volume of loading March, traders said.
Petrochina and Cnooc did not respond to requests for comments.
In addition to imports at sea, Petrochina continues to lift 800,000-900,000 BPD Russian oil, most of the eSPO classes, through pipelines from Siberian Fields under the long-term agreement.
Sinopec, a Top Asian crude oil buyer, has filled the Russian import gap with cargo from West Africa, the Middle East and Brazil, the traders said.
Source: Reuters (reporting by Chen Aizhu and Florence Tan; Additional Reporting by Reuters Reporters in Moscow; Editing by Tony Munroe and Muralikumar Ananthaman)
