The high-stakes meeting between Donald Trump and Xi Jinping has created a “muddle” for the global oil market. Chinese refiners were left guessing as the leaders’ official readouts failed to mention Russian oil, a critical issue for the world’s top importer.
This silence is a significant problem. With China looking for new supplies, the US could potentially benefit from a new trade truce, but the lack of clarity from the summit is hindering any clear path forward.
The uncertainty is compounded by aggressive new Western sanctions. The US has targeted Russian producers Rosneft and Lukoil, while the UK/EU blacklisting of Yulong Petrochemical has sent a shockwave through the private sector.
As a result, Chinese refiners are in full retreat. State-owned firms Sinopec and PetroChina are canceling Russian cargoes, and private “teapot” refiners are steering clear, fearing secondary sanctions.
This has a direct impact on Russia’s finances, a clear goal of Western policy. This “buyers’ strike” has caused ESPO crude prices to dive and hit an estimated 400,000 barrels of oil per day.