The European Union’s latest package of sanctions against Russia will list four companies, including a Chinese trading firm and two independent Chinese oil refineries, involved in oil trade that have continued to circumvent Western restrictions.
According to EU sanctions envoy David O’Sullivan, China still insists that it does “normal trade” with Russia, contrary to the view by the West that it plays a central role in helping Russia circumvent sanctions.
The EU’s 19th sanctions package is expected to be the most economically significant. Previous packages listed Chinese entities involved in making drones, as well as those involved in the flow of dual-use goods to Russia. Back in July, Brussels sanctioned two small Chinese banks, prompting China to retaliate with bans on two Lithuanian banks.
That said, Russian oil has largely kept flowing to global markets despite the numerous sanctions imposed on the country by the United States and Europe. China remains the biggest buyer of Russian crude oil, even as U.S. President Donald Trump continues to threaten China and India with dire consequences for buying large quantities of Russian oil.
According to customs data published by SCMP, China’s oil imports from Russia increased 4.3% month-on-month in September to 8.29 million tons, good for 17.5% of the country’s total oil imports. However, China’s imports from Russia have declined by a similar margin compared to a year ago.
“The increased Russian oil purchases may be China’s act of defiance ahead of further talks with the US,” Xu Tianchen, senior economist with the Economist Intelligence Unit, told the SCMP. “I can’t see why China would give up Russian oil unless, for example, Trump is willing to remove all its tariffs on China and lift sanctions on Chinese companies.”
Meanwhile, U.S. President Donald Trump said he discussed trade with Indian Prime Minister Narendra Modi earlier this week, during which Modi reportedly assured that India would scale back its purchases of Russian crude oil, according to Reuters.
At the same time, India and the United States are reportedly nearing a trade deal that would lower U.S. tariffs on Indian exports to around 15-16 percent in exchange for a gradual reduction in Russian oil imports, reported by Reuters.
By Alex Kimani for Oilprice.com
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