**China’s Refiners Get Cheaper Russian Oil**
Chinese oil refineries are being offered Russian crude at lower prices. This is happening because of concerns over U.S. sanctions that make it hard to buy and sell oil.
The U.S. imposed sanctions on Russia in January, targeting some of its biggest oil companies and tankers. As a result, the cost of delivering Russian oil to China has gone up five times, from $1.5 million to $7 million. This is too expensive for many Chinese buyers.
**Higher-Quality Oil Still in Demand**
Despite the challenges, there is still demand for higher-quality Russian crude called ESPO. It usually sells at a premium in Asian markets. However, supplies of this oil are being sold at a lower price because they are being transported on non-sanctioned tankers.
Some buyers and sellers are trying to find ways to avoid U.S. sanctions by using lesser-known oil terminals or unloading shipments outside of Shandong province. This would make it harder for the government to monitor their activities, but it would also increase costs that most refineries cannot afford.
**Russia’s Economy**
The Russian fossil fuel industry is a major driver of Moscow’s war against Ukraine. China has strengthened its ties with Russia since the start of the conflict, but many Chinese financial institutions are scaling back their dealings with Russia due to fears of secondary sanctions.
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