By Florence Tan, Siyi Liu, Chen Aizhu and Nidhi Verma
SINGAPORE/NEW DELHI (Reuters) – Chinese and Indian refiners are scouring the globe for supplies of crude as fresh U.S. sanctions on Russian producers and tankers curb shipments to Moscow’s top customers, traders said.
The U.S. Treasury on Friday imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil, as it targets the revenues Moscow has used to fund its war with Ukraine.
Many of the tankers have been used to ship oil to India and China as Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some tankers have also shipped oil from Iran, which is also under sanctions.
On Monday, China reiterated its opposition to unilateral U.S. sanctions.
The measures have disrupted the trade in sanctioned oil, pushing Chinese and Indian refiners back to sellers of non-sanctioned oil, tightening supply and driving up spot premiums for crude produced in the Middle East to Africa and Brazil, traders said.
Over the weekend, new Chinese refiner Yulong Petrochemical bought 4 million barrels of Abu Dhabi’s Upper Zakum crude loading in February and March from Totsa, the trading arm of French energy major TotalEnergies, traders said.
The cargoes are for its 400,000 barrel per day refining complex in Yantai, eastern Shandong province, which started trial runs in September.
Yulong, which has previously bought Russian ESPO Blend crude, has purchased Angolan and Brazilian crude in recent weeks, traders said, and is now in talks to buy more oil from West Africa as well as Canada.
The refiner purchased 2 million barrels of Angolan Girassol and Nemba crude and also 2 million barrels of Brazilian Buzios and Tupi crude, they said.
The sources declined to be named as they were not authorised to speak to media. Yulong and Totsa typically do not comment on commercial deals.
Indian refiners which bought spot Middle East crude last week before the sanctions were announced, are still looking for more cargoes, more traders said.
India’s Bharat Petroleum Corp Ltd bought 2 million barrels of February-loading Oman crude from Totsa via a tender last week, two people familiar with the matter said.
The strength of the demand is helping Totsa offload an overhang of Middle East crude supplies after it amassed cargoes via S&P Global Platts’ trading platform in the past four months, traders said.
Global Brent crude futures rose above $81 a barrel to their highest since August during Monday’s trade. [O/R]
