Crude Oil Surges 5% as Chinese Firms Halt Russian Oil Purchases
New US sanctions prompt state-owned refiners to suspend seaborne imports, tightening global supply and sending prices to a multi-week high.
Crude oil prices jumped by over 5% in Thursday trading after reports that China's major state-owned oil companies have suspended purchases of seaborne Russian crude, a direct response to a new round of US sanctions targeting Moscow's energy sector.
The move sent West Texas Intermediate (WTI) futures soaring 5.1% to $61.50 per barrel, while Brent crude, the international benchmark, climbed 4.9% to settle at $65.66 a barrel. The sudden halt from one of Russia's most important customers threatens to remove a significant volume of oil from the global market, reversing a recent trend of falling prices.
According to reports first published by Reuters, state-owned giants including PetroChina and Sinopec are behind the suspension. The decision follows the imposition of fresh US sanctions aimed at major Russian producers Rosneft and Lukoil, escalating economic pressure on Moscow.
This development marks a significant policy shift for Beijing, which has served as the largest single buyer of Russian crude since Western nations imposed energy sanctions in 2022. Chinese refiners have consistently absorbed barrels shunned by Europe, often at a discount. The suspension, which could affect between 250,000 and 500,000 barrels per day, suggests that the risk of facing secondary US sanctions now outweighs the benefits of cheaper Russian oil for these state-controlled entities.
Analysts suggest the move is a pragmatic decision to safeguard Chinese firms' access to the US dollar-based global financial system. While Beijing has publicly opposed unilateral sanctions, its corporate giants are demonstrating caution to avoid being locked out of international markets.
The halt is currently understood to apply only to seaborne crude. Pipeline imports, which account for a substantial portion of the trade—approximately 900,000 barrels per day via the East Siberia Pacific Ocean (ESPO) pipeline—are expected to continue flowing without interruption.
The disruption is already rippling through global energy markets, forcing major consumers to seek alternative supplies. Market analysts noted that both China and India may now have to compete for barrels from other producers, potentially tightening global markets further and supporting higher prices for non-sanctioned crude. Traders will be closely watching whether the suspension is a short-term measure while companies assess legal risks or a more durable realignment in global energy flows.