Chinese Suspension of Russian Oil Purchases Shakes Global Market

Chinese state oil companies have halted purchases of seaborne Russian oil due to U.S. sanctions on Rosneft and Lukoil. This move, alongside India's reduced imports, is expected to strain Moscow's oil revenues and elevate global oil prices as major importers seek alternative sources.

Chinese state oil majors have suspended the acquisition of seaborne Russian oil following the imposition of U.S. sanctions on Moscow's leading energy companies, Rosneft and Lukoil. According to multiple trade sources, this development could have significant repercussions on global oil markets.

Chinese companies PetroChina, Sinopec, CNOOC, and Zhenhua Oil have temporarily refrained from purchasing Russian oil due to concerns over sanctions. This decision aligns with India's drastic reduction in oil imports from Russia in light of recent geopolitical tensions arising from the Kremlin's actions in Ukraine.

As a result, global oil prices are likely to rise as importers shift to alternative sources in the Middle East, Africa, and Latin America. While independent Chinese refiners might pause to assess the sanctions' impact, they might continue their purchases moving forward. Meanwhile, China's pipeline imports of Russian oil are expected to continue unaffected.

(With inputs from agencies.)