China’s State Oil Majors Halt Russian Crude Purchases Amid Sanctions Pressure

China Suspends Seaborne Russian Oil Purchases

· Chinese state oil majors (PetroChina, Sinopec, CNOOC, Zhenhua Oil) have halted seaborne Russian oil buys due to U.S. sanctions on Rosneft and Lukoil.

· This follows similar moves by Indian refiners, including top buyer Reliance Industries, under U.S. pressure.

Impact on Russian Oil Revenues

· India and China are Russia’s largest seaborne oil customers.

· A sharp drop in demand from both will strain Moscow’s oil revenues and likely push global oil prices higher.

Breakdown of Chinese Imports

· China imports ~1.4 million bpd of Russian oil by sea, mostly via independent refiners (“teapots”).

· State refiners bought between 250,000–500,000 bpd in early 2025, per Vortexa and Energy Aspects.

· Unipec (Sinopec’s trading arm) ceased Russian oil purchases after UK sanctions.

Trade Dynamics & Market Shifts

· Rosneft and Lukoil typically sell to China through intermediaries.

· Independent refiners may pause purchases but are expected to resume cautiously.

· Pipeline imports (~900,000 bpd to PetroChina) are likely unaffected.

Global Ripple Effects

· India and China will seek alternative supplies from the Middle East, Africa, and Latin America.

· This shift is expected to increase prices for non-sanctioned crude globally.

[ABS News Service/24.10.2025]

Chinese state oil majors have suspended purchases of seaborne Russian oil after the United States imposed sanctions on Rosneft and Lukoil, Moscow's two biggest oil companies, multiple trade sources said on Thursday.

The move comes as refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut their crude imports from Moscow, to comply with the U.S. sanctions imposed over the Kremlin's invasion of Ukraine.

A sharp drop in oil demand from Russia’s two largest customers will put a strain on Moscow’s oil revenues and force the world’s top importers to seek alternative supplies and push up global prices.

Chinese national oil companies PetroChina (601857.SS), opens new tab, Sinopec, CNOOC and Zhenhua Oil will refrain from dealing in seaborne Russian oil at least in the short-term due to concern over sanctions, the sources said.

The four companies did not immediately respond to requests for comment.

While China imports roughly 1.4 million barrels of Russian oil per day by sea, most of that is bought by independent refiners, including small operators known as teapots, although estimates of purchases by state refiners vary widely.

Vortexa Analytics pegged Russian oil purchases by Chinese state firms at under 250,000 bpd for the first nine months of 2025, while consultancy Energy Aspects put it at 500,000 bpd.

Unipec, the trading arm of Sinopec (600028.SS), opens new tab, stopped Russian oil buying last week after Britain designated Rosneft and Lukoil, as well as shadow fleet ships and Chinese entities including a major Chinese refiner, two trade sources said.

Rosneft and Lukoil sell most of their oil to China through intermediaries instead of directly dealing with buyers, traders said.

Independent refiners, meanwhile, are likely to pause buying to assess the impact of sanctions but would still look to continue Russian oil purchases, several traders said.

Prior to Wednesday's sanctions announcement, offers for November-loading ESPO crude slid to a premium of $1 per barrel to ICE Brent, versus previous trades done in early October at a $1.70 premium.

China also imports approximately 900,000 bpd of Russian oil by pipeline, all of it going to PetroChina, which several traders said was likely to be little affected by sanctions.

India and China are expected to turn to other supplies, pushing up prices for non-sanctioned oil from the Middle East, Africa and Latin America, traders said.