Chinese state-owned oil companies have temporarily halted their purchases of Russian seaborne crude after the United States hit Moscow’s two largest oil producers, Rosneft and Lukoil,

with new sanctions, according to multiple industry sources.

The suspension follows a similar move by India — the biggest buyer of Russian seaborne oil — as refiners there also cut imports to comply with Washington’s latest measures tied to Russia’s ongoing war in Ukraine.

The combined pullback from China and India, Russia’s two main customers, could deal a serious blow to Moscow’s oil revenues and tighten global supplies, likely driving up crude prices worldwide.

China’s major state refiners — PetroChina, Sinopec, CNOOC, and Zhenhua Oil — have all paused dealings in Russian seaborne crude for now, wary of falling afoul of U.S. sanctions, sources familiar with the matter said. None of the companies have commented publicly on the suspension.

While China imports roughly 1.4 million barrels of Russian oil per day by sea, most of that supply is handled by smaller, independent refiners known as “teapots.” The exact amount purchased by state-owned firms varies, but estimates put it between 250,000 and 500,000 barrels per day this year, according to data from Vortexa Analytics and Energy Aspects.

Sinopec’s trading arm, Unipec, stopped buying Russian oil last week after the U.K. expanded its sanctions to include Rosneft, Lukoil, several ships in the so-called “shadow fleet,” and even some Chinese entities, including a large state refiner, two trade sources said.

Traders noted that Rosneft and Lukoil typically sell to China through intermediaries rather than directly. Independent refiners are expected to briefly pause purchases to assess the sanctions’ impact but may soon resume buying discounted Russian barrels.

Even before the sanctions were announced, market data showed weakening demand: November-loading ESPO crude from Russia’s Far East had already dropped to a premium of $1 per barrel over ICE Brent, compared to about $1.70 earlier in the month.

Pipeline imports of Russian oil — about 900,000 barrels per day, all of which go to PetroChina — are expected to continue unaffected for now, traders added.

With Russia facing shrinking demand from its two biggest customers, both China and India are expected to shift toward other suppliers, likely driving up prices for crude from the Middle East, Africa, and Latin America. Photo by Otebig at English Wikipedia.