China’s state-owned and independent refiners have begun scaling back purchases of Russian crude following new U.S. sanctions on Rosneft and Lukoil, a shift that could alter Asia’s oil trade flows and weigh on Moscow’s export revenues.
Industry sources told Reuters that PetroChina, Sinopec, CNOOC and Zhenhua Oil have suspended seaborne buys “at least for the short term” over exposure to secondary sanctions. Pipeline deliveries to PetroChina are expected to continue, but the pause on seaborne cargoes marks a material change in buying patterns.
Further indications of a pullback emerged this week. Bloomberg reporting, cited by several outlets, said state majors had cancelled some previously booked Russian cargoes and that independent “teapot” refiners were standing aside pending clarity on sanctions risk. Market summaries noted that Chinese buyers had paused new purchases and, in some cases, cancelled liftings already on the slate.
Price signals reflect the change in sentiment. Russia’s ESPO Blend—typically commanding a premium into China—has flipped to a discount against Brent at Chinese ports for the first time in about a year, as sellers cut offers to keep flows moving amid weaker Chinese demand and quota constraints for independents.
The sanctions backdrop is recent and specific. Washington announced measures targeting Rosneft and Lukoil in late October, with restrictions that also threaten secondary sanctions on foreign counterparties. Lukoil has since said it intends to sell certain international assets, underscoring the broader impact on Russian companies’ global operations.
Regional spillovers are visible beyond China. Indian refiners—Russia’s biggest seaborne customers since 2022—have paused some new orders while they assess compliance exposure, although state-run Indian Oil has indicated it will continue sourcing from non-sanctioned entities. Separately, one private Indian refiner has said it stopped buying Russian crude following the latest measures.
Turkey is also adjusting. Reuters reported on 2 November that the country’s largest refineries are increasing purchases of non-Russian grades—including Iraqi and Kazakh cargoes—reducing reliance on Russian supply in response to the sanctions environment.
The immediate effect in China appears concentrated in seaborne flows handled by state firms and some independents. Estimates of the affected volume vary. Industry consultancies place Chinese state companies’ seaborne Russian intake in a broad 250,000–500,000 barrels per day range, while pipeline imports of around 900,000 barrels per day are expected to continue. How long the pause endures will depend on financing channels, shipping availability, and any clarifications from U.S. authorities on permissible transactions.
Traders expect substitution if the pause persists. Refiners have scope to lift more from the Middle East, West Africa and Latin America, tightening differentials for those grades while widening discounts for Russian barrels into Asia. The recent move of ESPO to a discount points in that direction. For Russia, discounted pricing and deferred loadings would pressure near-term cash flows; for buyers, the netback calculus will hinge on freight, quality spreads and product cracks.
The policy context is fluid. During his 30 October meeting with China’s president, Xi Jinping, U.S. President Donald Trump said Russian oil “was not really discussed,” according to multiple reports. That remark suggests Beijing’s commercial decisions are being taken primarily through a sanctions-compliance lens rather than via a high-level political accommodation on energy purchases.
In the near term, market participants will watch for: any U.S. Treasury guidance on secondary sanctions exposure for non-U.S. refiners and banks; Chinese import quota allocations for independents; the ability of Russian sellers to re-route cargoes via intermediaries not designated under the latest measures; and whether discounts widen sufficiently to compensate buyers for legal and banking risks. The pace at which India and Turkey rebalance their slates away from sanctioned counterparties will further determine how much Russian crude must be discounted or redirected.
Taken together, China’s reduced appetite for seaborne Russian barrels, India’s mixed signals on future liftings, and Turkey’s incremental pivot to alternative grades indicate that the latest sanctions round is having a measurable, if uneven, effect on Russian crude trade. The scale and duration of that effect will depend on enforcement, the availability of compliant counterparties, and the willingness of refiners to bear operational and legal risks for discounted supply.
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