Sanctions curb Russian and Iranian oil supplies to China, according to Bloomberg
Expanded sanctions on Chinese ports and refineries are curbing flows of Russian and Iranian oil to China, although new bypass routes suggest the slowdown may be temporary.
This was reported by Bloomberg, according to Censor.NET.
According to estimates by the analytical firm Rystad Energy AS:
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Imports of Russian crude oil to China may decline by 500,000-800,000 barrels per day (about two-thirds of normal levels).
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Imports of Iranian oil may decline by 200,000-400,000 barrels per day (approximately 30%).
Reasons for restrictions
Major state-owned oil refining companies in China have suspended purchases of Russian ESPO crude oil following US sanctions against Rosneft and Lukoil.
Sanctions also affected the Chinese oil terminal in Rizhao, which handled about 10% of crude oil imports to China, limiting Iranian flows.
Some private Chinese refineries, previously more risk-tolerant, are also avoiding Russian oil due to the blacklisting of Shandong Yulong Petrochemical Co. by the EU and the UK.
Market impact and outlook
These measures have created an unusual level of anxiety in the market. Nervousness among Chinese buyers has intensified due to a reduction in purchases of Russian oil by Indian refineries. This indicates that Western measures to restrict the Kremlin's financial flows are gradually having an effect.
At the same time, the resilience of some ports already on the blacklist, such as Dongjiakou in Shandong province, suggests that oil flows could resume without strict monitoring and enforcement of sanctions.
- We would like to remind you that on October 23, the US Treasury Department announced the imposition of sanctions against major Russian oil companies Rosneft and Lukoil. The reason for the additional sanctions is Russia's lack of serious readiness for a peace process aimed at ending the war in Ukraine.
