According to the Financial Times, independent refiners from China are buying Russian oil at discounts despite the Western countries imposing heavy sanctions on Russia for its invasion of Ukraine.
The paper cited an official from an independent refinery in Shandong, China, saying that it did not disclose agreements with Russian oil exporters since the Russia–Ukraine war began to avoid scrutiny and possible sanctions from the West.
The official also said they had to take careful steps when buying Russian oil. Because if the U.S. imposes sanctions on third-country entities for doing business with Russia, it could close its Singaporean trading partner.
Shipping activity shows China’s oil buying from Russia has risen modestly.
Earlier, Ellen Wald, President of Transversal Consulting, told CNBC, “If they can buy Russian oil at a discount, and some of these discounts are pretty significant—$30 off the benchmark, then I really don’t see what would be stopping China from purchasing a lot of Russian oil.”
The U.S. and UK have stopped importing Russian oil. The EU is also preparing an oil embargo on Russia in the latest rounds of sanctions.
Last month, China’s Sinopec said that it would continue to import crude oil and gas from Russia even if Western sanctions were tightened.
Bloomberg reported that PetroChina—China’s largest oil and gas producer— is one of the state-owned firms discussing buying gas from Russia.
Bloomberg also reported that Chinese buyers are trying to keep a low profile. So as not to trade directly, they resort to so-called “sleeves,” or firms that can buy on their behalf to mask the acquisition.
In addition to China, India has also been buying cheap oil from Russia since the start of the war.
Senior oil analyst at Kpler, Jane Xie, told the Financial Times, “It’s a natural assumption to think China would buy more Russian crude but China is coming under far more scrutiny than India.”