A great “muddle” has paralyzed Chinese refiners, the world’s most important oil buyers. This uncertainty stems from a Trump-Xi summit that was silent on Russian oil, a critical issue.
Without political guidance, refiners are reacting to market threats. New US sanctions on Rosneft and Lukoil have state-owned firms canceling cargoes. The blacklisting of Yulong Petrochemical has “teapots” shunning the trade.
This “buyers’ strike” has hit Moscow hard, causing ESPO crude prices to plunge and supporting Western policy goals.
The situation is further complicated by a domestic quota crunch, with many teapots low on import allocations for the rest of the year.
As China looks for new supplies, the US could benefit from a trade truce, but the lack of clarity from the summit remains the biggest obstacle.