Chinese state oil companies and major private refiners are rushing to secure crude supplies as tighter sanctions on Iran and Russia threaten to disrupt near-term oil flows, Bloomberg reported on Tuesday.
According to traders cited by Bloomberg, companies such as Cnooc, Shandong Yulong Petrochemical Co, and Jiangsu Eastern Shenghong Co are urgently seeking crude, focusing on multiple grades from the Middle East, Africa, and the Americas. February cargoes are particularly in demand as refiners prepare for potential supply disruptions.
Smaller private refiners, known as "teapots", primarily based in Shandong province, are especially reliant on discounted crude from Iran and Russia. These refiners, already struggling with declining margins, may be forced to cut processing rates and fuel output if they lose access to these supplies.
Last Friday, the US Treasury sanctioned several vessels involved in transporting Iranian oil as part of a broader crackdown on Russia's network of ships used to evade US-led energy sanctions.
