Large oil refineries in China are urgently buying up oil cargoes, preparing for possible supply disruptions due to sanctions risks.
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“Chinese state-owned oil companies and large private oil refiners are snapping up oil cargoes from the Middle East and other regions, accelerating preparations for possible disruptions in fuel supplies as tightening sanctions against Russia and Iran threaten to limit oil flows in the near future,” experts say.
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Chinese companies, including CNOOC, Shandong Yulong Petrochemical Co and Jiangsu Eastern Shenghong Co, are sending urgent requests to buy oil for prompt delivery, the agency writes, citing traders. Sources add that various grades of oil from the Middle East, Africa and North and South America are being considered, with deliveries for February especially in demand.
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The move by major Chinese buyers comes amid concerns that smaller private refiners, already under pressure, could be forced to cut refining and reduce production if they no longer have access to discounted Russian and Iranian crude. noted in the material. If smaller operations fail, larger state-owned refiners are expected to have to step in to prevent fuel shortages in the domestic market.
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The administration of outgoing US President Joe Biden last Friday imposed sanctions against more than 200 companies and individuals associated with the Russian energy sector, as well as over 180 ships.
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The sanctions are aimed at limiting Moscow’s access to international markets and reducing revenues received from oil and gas exports. As part of the package, restrictions are also introduced against enterprises associated with the extraction and processing of energy resources, as well as ships involved in their transportation.
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Since the introduction of new sanctions, at least 65 oil tankers have dropped anchor in different parts of the world, including off the coasts of China, the Russian Federation and the Middle East. Bloomberg discovered three sanctioned oil ships off the coast of China that did not unload on time.
