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The US imposed sanctions on China for the first time over imports of oil subject to US restrictions. The sanctions targeted the Chinese oil refinery Luqing Petrochemical, its CEO, as well as eight shadow fleet vessels and four companies that own these tankers.
This was announced by the US Treasury Department’s Office of Foreign Assets Control (OFAC ) on Thursday, 20 March.
What is known about the sanctions?
OFAC notes that Luqing Petrochemical was engaged in the purchase of crude oil subject to US sanctions, probably from Russia, Iran or Venezuela. Along with the company, the sanctions also targeted companies that provide “shadow” oil supplies through schemes that circumvent international restrictions.
The sanctions list includes:
– The head of Luqing Petrochemical (name withheld);
– Eight tankers of the ‘shadow fleet‘ used to transport the sanctioned oil;
– Four companies officially owning these vessels but actually operating in grey schemes to circumvent sanctions.
This is the first time that Washington has directly punished China for oil imports that violate the sanctions regime.
How will this affect the trade in Russian oil?
The sanctions could complicate Russian oil exports, as China has been the main buyer of Russian energy resources since the West imposed sanctions on Moscow.
Possible consequences:
– Blocking payments and assets of sanctioned companies.
– Restriction of access to international financial transactions for Luqing Petrochemical.
– Strengthening control over the “shadow fleet” transporting Russian oil to China.
Sources in the energy sector note that the sanctions may prompt China to adopt a more cautious policy towards Russian energy imports, although a complete cessation of supplies is unlikely.
What’s next?
The US decision could have broad geopolitical implications:
– Rising tensions between Washington and Beijing over interference in Sino-Russian trade.
– China may respond by increasing its support for Moscow or even imposing counter-sanctions.
– Further sanctions against other Chinese companies if Washington decides to extend the restrictions.
The imposition of sanctions against China for its energy cooperation with Russia is a new signal that the US is tightening control over compliance with the sanctions regime and is ready to act even against major global players.
