Sinopec Shanghai Petrochemical, a major player in China's hydrocarbons market, has announced a significant reduction in Russian oil imports in the first quarter of 2025. The company's announcement on March 20 was an unexpected turn in its purchasing policy, especially considering that in 2024, the volume of oil purchased from Russia more than doubled to 1,22 million tons, which accounted for about 9% of Sinopec Shanghai Petrochemical's total purchases. The decision to refuse a significant portion of Russian supplies has caused a wide resonance in expert circles and among market participants, since China has long remained a mainstay for the Russian oil industry amid Western sanctions.

The changes in purchasing strategy are linked to “major shifts” in the global economic and political environment, said Du Jun, the company’s vice president and chief financial officer, at a press conference in Hong Kong after summing up the company’s 2024 results. Although he made no direct reference to sanctions in his speech, analysts agree that the decision was driven by fears of secondary restrictions from the Donald Trump administration, which took office in January 2025. The United States has stepped up pressure on countries that continue to cooperate with the Russian oil and gas sector, threatening fines and restrictions on access to American markets and technology. For Sinopec, like other Chinese state-owned companies, maintaining stable relations with the West has become a priority, despite favorable prices for Russian oil, which has been supplied at significant discounts in recent years.

The move marks a turning point in trade relations between Beijing and Moscow, which have been strengthening since 2022 amid a Western embargo. Since the outbreak of conflict in Ukraine, China has become the largest buyer of Russian oil, importing a record 2023 million tonnes in 107, making Russia China’s top supplier, overtaking Saudi Arabia. Sinopec Shanghai Petrochemical, a subsidiary of state-owned Sinopec Group, has played a major role in this process, increasing its purchases of ESPO and other grades. But the company is now shifting its focus to alternative sources such as West Africa, the Middle East and Brazil to diversify supplies and reduce risks.