Brent Jumps 5% On Fears Of China Snapping Russian Oil Purchase Amid Threats Of US Sanctions
As Russian supplies shrink, India and China are expected to turn to Middle Eastern, African, and Latin American crude, driving up prices for non-sanctioned oil in the global market.
Oil prices surged on Thursday as fresh sanctions on Russian energy giants roiled global supply chains.
Brent crude futures jumped 4.97% to $65.70, while WTI climbed 5.33% to $61.62, following a report by news agency Reuters that Chinese state-owned oil companies have suspended purchases of seaborne Russian oil in response to new US sanctions on Rosneft and Lukoil.
The US restrictions target Moscow's two largest oil companies as part of its measures against Russia's invasion of Ukraine. The fallout is immediate — China and India, Russia's top buyers, are expected to sharply cut crude imports from Moscow to comply with the sanctions.
A drop in demand from these two markets threatens to strain Russia's oil revenues and push global prices higher as importers scramble for alternative supplies.
According to trade sources, China's state oil majors PetroChina, Sinopec, CNOOC, and Zhenhua Oil will refrain from dealing in seaborne Russian oil, at least temporarily, amid fears of violating sanctions. The companies did not immediately respond to requests for comment.
While China imports about 1.4 million barrels per day (bpd) of Russian oil by sea, the bulk is purchased by independent refiners known as "teapots." Estimates of state refiner purchases vary, with Vortexa Analytics putting them at under 250,000 bpd for the first nine months of 2025, while Energy Aspects estimates around 500,000 bpd.
Traders noted that Rosneft and Lukoil typically sell through intermediaries rather than dealing directly with buyers. Independent refiners, meanwhile, are expected to pause purchases temporarily to gauge the sanctions’ impact but may resume buying later.
Before the sanctions announcement, November-loading ESPO crude offers had already slipped to a $1 per barrel premium to ICE Brent, down from $1.70 earlier in October.
China also brings in about 900,000 bpd of Russian oil by pipeline, all directed to PetroChina, a flow traders believe will remain largely unaffected by the sanctions.
As Russian supplies shrink, India and China are expected to turn to Middle Eastern, African, and Latin American crude, driving up prices for non-sanctioned oil in the global market.
