Sellers Cancel Deals with Chinese Oil Refiner Yulong After U.K. Sanctions

Several suppliers have canceled sales of Middle Eastern and Canadian oil to China’s Yulong Petrochemical after the U.K. imposed sanctions on the refiner — a move likely to push it toward purchasing more Russian crude — multiple sources familiar with the deals said, Chen Aizhu, Siyi Liu, and Florence Tan reported for Reuters.

Most of the cancellations apply to spot cargoes that were due to load after November 13, when the sanctions take effect. (Photo: Nanshan Group)

The refiner, China’s newest with a capacity of 400,000 barrels per day and one of the country’s largest single buyers of Russian oil, is among the entities Britain designated last week to curb Moscow’s oil revenues used to fund the war in Ukraine.

Suppliers unwinding contracts include European majors TotalEnergies and BP, as well as Saudi Aramco, Kuwait Petroleum Corp., and Chinese state trader PetroChina International, the sources said.

Most of the cancellations apply to spot cargoes that were due to load after November 13, when the sanctions take effect.

They include two shipments of 2 million barrels each from Kuwait Petroleum and Aramco, according to three sources with direct knowledge of the deals.

PetroChina International and TotalEnergies also exited transactions supplying Access Western Blend, a heavy crude exported from Canada, according to two other sources familiar with those contracts.