Finance
China Oil Majors Resume Seeking Russian Oil After a 4-month Halt, Sources Say
Published by Global Banking & Finance Review®
Posted on March 17, 2026
3 min readLast updated: March 17, 2026
Quick Summary
Chinese state‑owned oil giants—Sinopec and PetroChina—have, after a four‑month pause, resumed inquiries into buying Russian crude under a new 30‑day U.S. sanctions waiver beginning March 12, potentially reversing a halt since November.
China’s Oil Majors Seek Russian Crude Amid Supply Fears and Sanctions Waiver
Chinese State Oil Majors Resume Russian Crude Purchases
By Chen Aizhu and Florence Tan
Supply Shortages and Sanctions Waiver Drive Renewed Interest
SINGAPORE, March 17 (Reuters) - Chinese state oil majors looking to head off supply shortages caused by the war in the Middle East have resumed seeking Russian crude cargoes after a four-month hiatus, taking advantage of a U.S. sanctions waiver, five trade sources said.
Trading arms under state-run Sinopec and PetroChina have this week made inquiries with suppliers for possible purchases of Russian oil, which would be their first since November, said five sources close to or involved in Russian oil trade.
Imminent Transactions and Price Advantages
While no deals were known to have been struck as of Tuesday, two of the sources said transactions were likely to be imminent as Russian oil remains cheap versus rival supplies from Brazil and West Africa despite surging prices and premiums triggered by the U.S.-Israel war on Iran that began on February 28.
Chinese oil majors were "assessing" the situation, said a state oil trader, including whether payment and delivery could be completed within the 30-day waiver window that began on March 12 and applies to cargoes that had already been loaded.
Sinopec and PetroChina did not immediately respond to requests for comment.
Alternative Sourcing Strategies
One of the sources, involved in Russian oil trading and familiar with PetroChina's trading operations, said majors could also seek to secure cargoes while the situation is "messy" by buying from Chinese independent refiners or traders with Russian-origin oil already in storage.
Role of Independent Refiners ("Teapots")
"Some teapots are ready to resell, as that makes more money for them than processing at their plants," said the source, referring to the independent refiners.
End-April arriving ESPO blend, Russia's flagship Far East export grade, was last heard offered by a Russian producer at $8 a barrel above July ICE Brent on delivered basis.
That compared with April-loading Brazil's Tupi grade last pegged at a premium of $12-15 premium over dated Brent.
Market Dynamics and Pricing Trends
From Discount to Premium
FROM DISCOUNT TO PREMIUM
Differentials for ESPO, mostly consumed by China's independent refiners, flipped into a $2-$3 premium last week for April/May shipments, compared with discounts of $7-$10 for March-loading barrels.
China's seaborne Russian oil imports surged to an all-time high of 1.92 million barrels per day in February, Kpler data showed, as independent buyers snapped up deeply discounted cargoes after top buyer India's demand fell.
Impact of U.S. Sanctions and Price Spikes
State oil companies had since late October suspended buying Russian oil after Washington imposed sanctions on Moscow's two biggest oil companies, Rosneft and Lukoil.
The spikes in spot premiums and outright Brent prices to more than $100 a barrel, would however sideline independent refiners, said three of the sources, as they are cushioned for the near term with cheaper inventories of Russian and Iranian oil bought before the war.
Reporting Credits
(Reporting by Chen Aizhu, Florence Tan; Additional Reporting by Siyi Liu,Editing by Tony Munroe and Raju Gopalakrishnan)
Key Takeaways
- •Chinese state oil majors halted seaborne Russian oil purchases around November due to U.S. sanctions on Rosneft and Lukoil, but are now resuming inquiries under a 30‑day waiver issued March 12, 2026.
- •Independent refiners (‘teapots’) continue to absorb discounted Russian crude—February imports hit record highs of ~2.08 million bpd—boosting Chinese volumes while providing flexibility amid policy shifts.
- •U.S. waiver facilitates resumption, but concerns over sanctions and logistical constraints persist; meanwhile, Chinese refiners are cushioned by stockpiles and alternative supplies from Iran and elsewhere.
Frequently Asked Questions about China oil majors resume seeking Russian oil after a 4-month halt, sources say
1Why did Chinese oil majors halt Russian crude purchases?
Chinese state oil companies paused Russian crude buying after the U.S. imposed sanctions on Moscow's top oil firms, Rosneft and Lukoil in late October.
2What prompted Chinese majors to resume seeking Russian oil?
Supply concerns from the Middle East war and a U.S. sanctions waiver enabled Chinese oil firms to resume inquiries for Russian crude after four months.
3How does Russian crude pricing compare to other suppliers?
Russian oil remains cheaper than alternatives from Brazil and West Africa, with ESPO blends offered at lower premiums than Brazil's Tupi grade.
4What is the effect of the U.S. sanctions waiver?
The 30-day waiver allows Chinese firms to buy specific Russian oil cargoes, provided payment and delivery occur within the period.
5Who are the main buyers of Russian oil in China?
Both state oil majors, Sinopec and PetroChina, and independent refiners known as 'teapots,' have purchased Russian oil, especially when spot prices are discounted.
