Teapots and Giants Align: A Chinese “Buyers’ Strike” on Russian Oil

In a rare alignment, China’s small “teapot” refiners and its state-owned giants are both shunning Russian oil. This united “buyers’ strike” is a direct response to a new, more aggressive round of Western sanctions.
The giants, Sinopec and PetroChina, are backing away after the US sanctioned Russian producers Rosneft and Lukoil. The teapots are in retreat after the UK and EU blacklisted one of their own, Shandong Yulong Petrochemical Co., making the risk of penalties feel immediate and real.
This has caused a collapse in demand for Russian crude, with the ESPO grade’s price plunging. Rystad Energy AS estimates the disruption at 400,000 barrels a day, a staggering 45% of China’s Russian imports.
This is a major blow to Russia, which had relied on China as its top customer after the Ukraine invasion. The US and its allies are now ratcheting up pressure on those customers to choke off Moscow’s war funding.
The situation is complicated by a domestic issue: teapots are also low on crude import quotas. This means their ability to buy Russian oil is limited for the rest of the year, even if they were willing to risk the sanctions.