Reuters reported on Thursday, Apr 7, that China’s state refiners are continuing existing Russian oil contracts but won’t buy more despite steep discounts.
State-owned buyers, such as Sinopec, CNOOC, PetroChina, and Sinochem, have avoided Russia’s Eastern Siberia–Pacific Ocean oil pipeline at May loading.
Russia’s oil price was reduced after Washington banned Russian trading oil last month after Russia invaded Ukraine in late February. The European Union also imposed sanctions on top Russian exporters Rosneft and Gazprom Neft.
In recent weeks, Unipec, Sinopec’s trading branch, has cautioned its global teams about the dangers when trading Russian oil.
One source disclosed messages to Reuters about its regular internal meetings, saying, “The message and tone are clear – risk control and compliance comes before profits.”
The source added, “Although Russian oil is hugely discounted, there are many issues like securing shipping insurance and payment snags.”
A refiner said that Unipec asked him to find another crude supplier to replace Russian crude.
He added, “Beyond shipments that have arrived in March and due to arrive in April, there will be no more Russian oil going forward,”
Chinese oil importers have also faced payment problems even for earlier deals as some state banks are reducing funding of Russian oil-related deals.