China has voiced its opposition to the U.S. sanctions on Russia’s oil companies, emphasizing the need for sanctions to be in line with international law. Meanwhile, the European Union (EU) imposed fresh Russian sanctions on Thursday.
China Criticizes US, EU Imposes Fresh Sanctions On Russia
China’s response to the U.S. sanctions on Russian oil giants, Lukoil and Rosneft, was conveyed by Guo Jiakun, a spokesperson for the Chinese foreign ministry. Jiakun, in a regular press briefing on Thursday, criticized the U.S. sanctions, stating that they lack a basis in international law or United Nations Security Council authorization, as per Global Times, China’s state-run publication.
The EU has formally approved its 19th sanctions package against Russia over the war in Ukraine, which includes a ban on imports of Russian liquefied natural gas. The ban will be rolled out in two phases — short-term contracts will cease after six months, while long-term contracts will be terminated starting January 1, 2027.
The package also introduces a new system to restrict the movement of Russian diplomats inside the EU.
‘Act Of War,’ Russia Says
Russia's Foreign Ministry slammed the US sanctions as "entirely counterproductive," and clarified that it won’t "pose any particular problems" for Russia, reported CNN.
At the same time, Dmitry Medvedev, deputy chairman of Russia's security council, called it an “act of war” and wrote on Telegram: "The United States is our adversary, and their talkative ‘peacemaker' has now fully embarked on the warpath against Russia," as per Reuters.
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US Moves to Isolate Russian Oil Giants
President Donald Trump, during a meeting with NATO Secretary General Mark Rutte on Wednesday, told reporters that China, as a major buyer of Russian oil, could “influence” Russia’s decisions regarding Ukraine. Trump also confirmed canceling the anticipated meeting with Russian President Vladimir Putin, stating, "It just didn't feel right to me."
The sanctions by the U.S. aim to effectively isolate Rosneft and Lukoil from the U.S. banking system, prohibiting them from operating in dollars. Violators, including foreign financial institutions, face severe penalties, including cascading sanctions.
Western Oil Firms Face Supply Disruption
These sanctions and the ongoing Ukraine conflict have already started impacting Western oil companies. For instance, Chevron (NYSE:CVX) and Shell (NYSE:SHEL) had to slash oil and gas production at a major field in Kazakhstan following a Ukrainian drone attack on a Russian gas processing plant.
Meanwhile, following these sanctions, Indian refiners, including India’s largest buyer of Russian crude, Reliance Industries Ltd., reportedly plan to significantly cut their imports of Russian oil.
Price Action
Crude oil futures are rallying on the news, up 5.33%, trading at $61.62 per barrel, when last checked, following weeks of steady declines in the commodity.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
