China rejects cheap Russian oil over Western sanctions
Chinese state refiners are not extending oil deals with Russian suppliers despite the heavily discounted offers in apparent bid to avert Western sanctions, posting gloomy outlook for the Russian economy as its war lingers in Ukraine.
The US banned Russian oil last month, and the EU has sanctioned energy giants Rosneft and Gazprom, a situation that triggered alarm bell for multinational oil firms that are exposed to international financial systems that are controlled by Western authorities.
According to reports by agency sources, while China has refrained from penalizing Russia for its war on Ukraine, state refiners are falling in line with Beijing’s recent call for caution by not signing new contracts as the West imposes sanctions.
The said government-run Sinopec, the largest refiner in Asia, as well as CNOOC, PetroChina, and Sinochem declined futures trading for Russian cargoes for May deliveries.
Since Washington banned Russian oil in March, Chinese refiners do not want to signal any support for Moscow, the report noted. Meanwhile, the European Union has sanctioned Russian energy giants Rosneft and Gazprom, while support is building within the EU to join the US in banning imports outright.
As Western sanctions continue to snag Russia’s economy, some analysts have said Putin may increasingly turn to China to pick up the slack as an economic lifeline.
But China’s apparent caution on new oil deals comes after previous signals of support for Russia. In early February, the two countries announced a “no limits” partnership.
And since Russia invaded Ukraine in February, China has not explicitly condemned Moscow’s invasion, as relations between two nations have grown closer in recent years.
