China decides not to buy oil from Russia due to sanctions

Chinese state oil companies have suspended purchases of Russian oil by sea after US sanctions on Moscow's two largest oil companies, Rosneft and Lukoil. Reuters reported this on Thursday (October 23) citing multiple trade sources.

Russia's two main buyers are China and India. However, Indian refineries have also decided to reduce imports of Russian oil in compliance with Washington's sanctions. As a result, it is expected that Russia's oil export revenue may decrease and instability may arise in the global oil market.

According to a Reuters report, four state-owned oil companies in China - PetroChina, Sinopec, CNOOC and Zhenhua Oil - have decided to refrain from selling Russian oil by sea, at least in the short term. They are said to be not taking any new shipments due to the risk of US sanctions.

China imports about 1.4 million barrels of Russian oil per day by sea. But most of it comes through small independent refineries, or so-called “tipot” companies. According to Vortexa Analytics, Chinese state-owned companies are expected to buy about 250,000 barrels of Russian oil a day in the first nine months of 2025. Energy Aspects, a consultancy, puts the figure at about 500,000 barrels a day.

Traders say Rosneft and Lukoil sell most of their oil to China through intermediaries rather than directly with buyers. Traders say the sanctions are also likely to cut off purchases by smaller independent refiners. But Russian oil will continue to be bought.

China currently imports about 900,000 barrels a day of Russian oil through pipelines, which are mainly controlled by PetroChina. Trade sources say the sanctions will have little impact on pipeline supplies.

China and India are now looking for alternative sources of oil in the Middle East, Africa and Latin America as they cut back on Russian oil purchases. According to analysts, this could result in an increase in the price of sanctions-free oil.