China state oil refiners ‘cautious’ of new Russian oil as Western sanctions mount over Ukraine invasion

Sinopec, China National Offshore Oil Corporation (CNOOC), PetroChina and Sinochem have stayed on the sidelines in trading fresh Russian cargoes for May loadings

Chinese state-owned firms do not wish to be seen as openly supporting Moscow by buying extra volumes of oil after sanctions imposed by the United States and European Union

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China and Russia have developed increasingly close ties in recent years, and as recently as February announced a “no limits” partnership, and China has refused to condemn Russia’s action in Ukraine or call it an invasion. Photo: Reuters

Published: 7:51pm, 6 Apr 2022

China’s state refiners are honouring existing Russian oil contracts but avoiding new ones despite steep discounts, heeding Beijing’s call for caution as Western sanctions mount against Russia over its invasion of Ukraine, six people told Reuters.

State-run Sinopec, Asia’s largest refiner, China National Offshore Oil Corporation (CNOOC), PetroChina and Sinochem have stayed on the sidelines in trading fresh Russian cargoes for May loadings, said the people, who all have knowledge of the matter but spoke on condition of anonymity given the sensitivity of the subject.

Chinese state-owned firms do not wish to be seen as openly supporting Moscow by buying extra volumes of oil, said two of the people, after Washington banned Russian oil last month and the European Union slapped sanctions on top Russian exporter Rosneft and Gazprom Neft.

“[State-owned enterprises] are cautious as their actions could be seen as representing the Chinese government and none of them wants to be singled out as a buyer of Russian oil,” said one of the people.

Sinopec and PetroChina declined to comment, while CNOOC and Sinochem did not immediately respond to a request for comment.