Bloomberg: Chinese "samovars" are ready to close due to sanctions on Russian oil

Private and independent refineries in the Chinese province of Shandong are experiencing a crisis due to new US sanctions on Russian oil. It has become too expensive for them due to restrictions, and some of the "samovars" are ready to close, since there is no oil at the same price.

Previously, China's independent refineries were not afraid of US sanctions and bought Russian oil at discounts. Now the very cost of raw materials has increased due to restrictions and "samovars" cannot afford it. Bloomberg writes about this.

"Independent Chinese refineries in Shandong Province have suffered the most after Washington's strictest package of measures against Moscow damaged the flow of their favorite ESPO oil from the Far Eastern port of Kozmino. In other parts of Asia, so-called private refiners, which are more dependent on fuel exports due to their small domestic markets, are also seeking to reduce purchases due to rising freight costs," the agency writes.

On January 10, the US Treasury imposed sanctions on Surgutneftegaz, Gazprom Neft, dozens of their enterprises and so many traders, owners of grey Fleet tankers and Sovcomflot. Previously, Chinese refineries were not afraid of sanctions, as they continued to receive cheap raw materials.

Now everything has changed. On the one hand, world oil prices have risen, followed by Russian oil prices. Because of the sanctions, the price of tanker freight has soared. So, according to Bloomberg, before the sanctions, the cost of transportation from Kozmino was $1.5 million, and now it is $7 million. In addition, the reduction of the fleet, which is ready to carry Far Eastern oil from For Russia, it is getting worse by the fact that not all ports are now ready to receive sanctioned raw materials. The operator of part of the terminals in Shandong Province recommended that the units not accept tankers that were sanctioned.

The agency's interlocutors said that independent refineries have already reduced processing by 20%, and in February the situation is likely to worsen. "Samovars" could be buying similar oil in the UAE and Oman, however, prices for this oil are high.