A “buyers’ strike” by Chinese refiners is slashing Russian oil imports, hitting Moscow’s finances. The price of ESPO crude has plunged, and an estimated 400,000 barrels a day are at risk.
This move by the world’s top importer is a direct reaction to Western pressure. State-owned Sinopec and PetroChina are canceling cargoes due to new US sanctions on Rosneft and Lukoil.
Private “teapot” refiners are also shunning the trade. They are reportedly terrified by the UK/EU blacklisting of Yulong Petrochemical, which set a dangerous precedent.
The retreat is happening amid diplomatic confusion. A Trump-Xi summit failed to provide clarity on the oil issue, leaving refiners in a “muddle.”
Furthermore, many teapots are low on annual crude import quotas, a domestic issue that compounds the problem for Russia.