Major refineries in China and Türkiye restart buying Russian oil

Russian oil falling below the $60 per barrel price cap and the absence of new restrictive measures from the US have somewhat eased concerns among major buyers wary of US sanctions.

According to a Reuters report citing industry sources, state-owned Sinopec, China’s and generally Asia’s largest oil refinery, has resumed imports after a pause in March to assess sanction risks.

Sources stated that Unipec, the Chinese company’s trading arm, signed contracts for ESPO grade oil to be shipped in May.

Shipments were suspended in March following a threat by US President Donald Trump to impose tariffs on buyers of Russian oil.

Tüpraş, meanwhile, placed an order for Ural grade oil last week. Tüpraş had halted purchases due to concerns about violating sanctions imposed by the Joe Biden administration on January 10.

However, in April, global oil prices fell due to the trade war initiated by Trump: the price of Brent crude oil dropped below $60 per barrel.

The price of Ural crude oil had fallen below $50, and although quotas were later increased, Russia’s main oil grade was still trading below $60.

Reuters sources explained that purchases made below the price cap set by Western countries allowed Tüpraş to carry out barrel imports from Russia without concern.

Sinopec, however, is not paying much attention to the price: ESPO crude oil is more expensive and has almost never sold for less than $60 per barrel throughout the price cap, which has been in effect for over two years.

Traders note that the cargoes purchased by the Chinese for loading in May were sold at a $2 premium to the Brent price.

Brent crude was trading below $67 on Wednesday, but had traded at lower prices in previous days.

Sources said that Unipec has so far signed contracts for far fewer cargoes than those purchased before Biden’s January sanctions.

India has also started increasing shipments, which it had reduced in February-March.