Reuters reported from sources on March 11 that a Russian oil and gas company has continued to export crude oil despite the current economic sanctions.
Russian firm Surgutneftegas was skipping Letters of Credit or LCs as it continued to sell its ESPO Blend crude to Chinese buyers. LCs is a key bank document that guarantees payment for international trading.
Following the sanctions for Russia's invasion of Ukraine, banks have been denying Russia LCs to prevent it from exporting oil.
China's largest source of spot oil is Russian ESPO crude shipments, which reached 754,000 barrels per day in April.
Without LCs, Surgutneftegas's Chinese buyers are also switching to open accounts that allow customers to acquire items on a delayed payment basis, with the obligation to pay in full three days after the shipment is loaded. In comparison, a Letter of Credit offers 30 days for payment, and banks have to cover the cost if the buyer does not fulfill their duty.
The sources declined to specify which Chinese companies they were due to "the sensitivity of the matter."