The Western sanctions strategy is biting hard in China. The UK/EU blacklisting of Yulong Petrochemical has terrified the country’s private “teapot” refiners, causing them to shun Russian crude.
This fear is mirrored in the state sector. Giants Sinopec and PetroChina are canceling Russian cargoes in the wake of new US sanctions against producers Rosneft and Lukoil.
This “buyers’ strike” by the world’s top importer has sent ESPO crude prices plunging. The move, which affects an estimated 400,000 barrels a day, is a clear victory for Western policy aimed at cutting Russia’s war funding.
The market is also contending with a “muddle” following a Trump-Xi summit. The leaders’ failure to address the oil issue publicly has left refiners in a state of maximum uncertainty.
As China seeks new supplies, the US could benefit. However, the situation is complicated by the fact that many teapots are also running low on annual crude import quotas.