Chinese and Indian refiners are sourcing crude oil globally following US sanctions on Russian oil producers. Sanctions restrict shipments, pushing Asian refiners to seek non-sanctioned alternatives. Notable transactions involve new buyers from Abu Dhabi and continued interest in Middle Eastern crude despite sanctions. The sanctions also complicate shipping logistics and increase crude prices and premiums.

Chinese and Indian refiners are actively seeking crude oil supplies worldwide following the recent imposition of US sanctions targeting Russian oil producers and their tankers. The US Treasury’s latest sanctions against companies such as Gazprom Neft and Surgutneftegas are designed to limit revenue flows to Moscow linked to its military operations in Ukraine. Consequently, trade routes for Russian oil are increasingly shifting from Europe to Asia, raising demand for alternative non-sanctioned oil supplies from regions including the Middle East, Africa, and South America.

In response to these sanctions, refiners like Yulong Petrochemical from China have turned to alternative sources, procuring four million barrels of crude from Abu Dhabi. The company, which has already purchased oil from Russia in the past, is also looking for supplies from Angola and Brazil to meet its refining needs in Shandong. Similarly, Indian refiners, such as Bharat Petroleum, continue to seek cargoes, evidenced by their recent transactions for Middle East crude prior to the sanctions announcement.

The sanctions have led to heightened complexities in the shipping industry, with implications for companies operating vessels linked to sanctioned oil producers, as noted by a trading executive involved in the Russian oil market. Market dynamics have shifted significantly, evidenced by a notable increase in Brent crude prices and spot premiums for Middle Eastern oil, both of which have surged in response to supply disruptions. Meanwhile, the sanctions also target Chinese logistics firms involved in domestic oil transportation, which could limit their impact due to established payment practices in Chinese yuan.

Overall, as geopolitical tensions and sanctions unfold, the oil market is adapting with evolving supply chains and increased focus on non-sanctioned sources.

The imposition of US sanctions on Russian oil producers comes amidst ongoing geopolitical tensions resulting from Russia’s military actions in Ukraine. These sanctions aim to cut off financing sources for the Russian government and redirect global oil trade, which has historically flowed between Europe and Russia, towards Asia, notably India and China. The dynamics in crude oil trading are shifting as refiners adjust their procurement strategies in response to these regulatory changes, significantly affecting prices and shipping logistics across various regions.

In summary, the US sanctions against Russian oil producers have compelled Chinese and Indian refiners to seek alternative crude supplies worldwide, notably shifting their focus towards non-sanctioned oils from the Middle East, Africa, and Brazil. The impact of these sanctions has prompted sharp increases in crude prices and changes in shipping practices, highlighting the adaptability of the oil market amidst significant geopolitical pressures. Refiners continue to explore new procurement strategies as they navigate the complexities imposed by international sanctions.

Original Source: www.ndtv.com

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