OilPrice:

By Tsvetana Paraskova

China’s imports of oil from Russia and Iran are set to drop this month as importers and refiners are more careful and still devise workarounds after the U.S. stepped up sanctions on Russia’s oil exporters and on China’s terminals that are key import hubs for sanctioned Iranian crude.

Imports from Russia could drop by up to 800,000 barrels per day (bpd) in November compared to the levels before the U.S. sanctions on Rosneft and Lukoil, according to estimates by Rystad Energy cited by Bloomberg. Due to a separate set of U.S. and EU sanctions on China’s key import terminals for Iran’s oil, Chinese imports of crude from Iran could drop by about 30% in November from previous months, Rystad Energy reckons. 

China’s state-owned majors including Sinopec and PetroChina have canceled previously ordered Russian oil cargoes, and large state and private refiners are looking for alternative supply in the short term.

The smaller independent refiners in the province of Shandong are more risk tolerant and willing to take sanctioned barrels at the current heavy discounts, but their problem is the lack of available government quotas for crude imports. 

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