China state firms curb Russian oil imports on sanctions risks, sources say

Russian oil supplies to top buyers India and China fell sharply following the January 10 sanctions by the former Biden administration targeting Russian producers Gazprom Neft and Surgutneftegaz as well as insurers and more than 100 vessels to curtail Moscow's oil revenue.

While Russian shipments to the two Asian countries have rebounded after more non-sanctioned tankers joined the trade, China's state-run Sinopec and Zhenhua Oil halted purchases of March-loading Russian oil due to concerns over dealing with the sanctioned firms, sources with knowledge of the matter said.

The scaled-back buying by Chinese state players has weighed on Russian oil prices, eating into Moscow's revenue and putting additional pressure on Russia ahead of a possible ceasefire deal with Ukraine.

A Beijing-based state oil source said his company ceased Russian oil deals as it undertakes more compliance checks and waits for a «clear picture» on a possible Russia-U.S. deal to end the Ukraine war.

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The company would resume purchases if talks lead to the U.S. easing or lifting sanctions on Russian oil, the person added, declining to be named or to identify their company as they are not authorised to speak with media.

Surgutneftegaz and Gazprom Neft account for about a third of seaborne shipments of Russia's Far East flagship grade, ESPO blend. The two export about 1.2 million metric tons to China per month combined, or roughly 300,000 barrels per day (bpd).

A trading executive close to a Russian supplier regularly dealing with Chinese state buyers said the companies were shunning oil produced by the newly sanctioned companies.

«They are taking a break for now while contemplating if there are ways to work around,» the executive