China Steps In as Indian, Turkish Refineries Face New Russian Oil Sanctions
On January 6, a Panamanian-flagged tanker, the Bela 6, arrived in Izmit, Turkey, delivering nearly 100,000 tons of Russian oil. This delivery was notable for Tupras, the refinery’s owner, as it significantly deviated from their recurring practices. In December, Tupras cut its Russian crude imports by 69%, preparing for European Union sanctions set to take effect on January 21.
Impact of EU Sanctions on Russian Oil Imports
The new EU regulations prohibit the import of products derived from Russian oil. This measure aims to diminish the financial resources available to Moscow amid the ongoing war in Ukraine. Refineries in Turkey and India, which rely on Russian crude to produce jet fuel and diesel, are particularly affected. Following previous sanctions, these refineries faced increasing volatility in overall oil supplies.
David Edward from General Index commented on this phenomenon, remarking on the global geopolitical shifts impacting the oil market. The International Energy Agency (IEA) indicated that Russian oil revenues have plummeted to levels not seen since 2022, largely due to these geopolitical tensions.
Refineries and Roads to Evade Sanctions
The EU’s ban is part of the bloc’s 18th sanctions package, announced in July, allowing refineries a preparatory window. Analysts suggest that while Indian refineries have largely ceased importing Russian crude, Turkish refineries continue to source it, albeit at reduced volumes of 20-30%.
- India’s imports of Russian crude fell by 29% in December 2025.
- G7 price caps and additional US sanctions have also contributed to declines in imports.
Despite these sanctions, some refineries may attempt to disguise the origins of their crude oil. There are concerns that exemptions for countries like Britain could enable the export of refined products derived from Russian oil back to the EU.
China’s Role in the New Oil Landscape
With the withdrawal of Russian oil by India and Turkey, China may step in to absorb some of these supplies. Data from CREA revealed a 23% increase in China’s seaborne crude imports from Russia in December. Small, independent refineries known as “teapots” may play a key role in this shift. These refineries account for significant refining capacity and often pivot between Russian and Iranian crude based on favorable conditions.
Erica Downs, a senior researcher at Columbia University, explained that while China may not absorb all the oil discarded by other nations, some of the smaller refineries are likely to seize the opportunity, provided the pricing aligns with their risk tolerances.
While major oil companies in China are cautious regarding sanctions, many independent refineries operate with lower exposure to the U.S. dollar financial system, making them more flexible in acquiring sanctioned crude oil. This dynamic raises concerns over the overall impact of sanctions on Russia’s export revenues.
Final Thoughts
Experts assert that although current measures are expected to decrease Russian oil exports and revenues, further efforts are necessary to enforce compliance and close existing loopholes. Enhanced international cooperation will be critical to mitigate revenue streams for the Kremlin effectively.
