Why was Shandong Yulong Petrochemical sanctioned by the UK and EU?

Shandong Yulong Petrochemical was sanctioned for its dealings in Russian oil, which benefits Moscow.

How have sanctions affected Shandong Yulong Petrochemical's operations?

Sanctions have led to isolation from global suppliers, customers, and financial institutions, forcing it to buy more Russian oil.

What does the situation with Yulong Petrochemical reveal about the global oil trade?

It highlights the increasing bifurcation of the global oil industry due to geopolitical tensions and sanctions.

Home / Business and Economy / Sanctioned Refiner Turns to Russia for Oil

Sanctioned Refiner Turns to Russia for Oil

26 Nov

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Summary

Western sanctions pushed Shandong Yulong Petrochemical to buy more Russian crude.
Foreign suppliers, customers, and banks exited Yulong after sanctions.
Yulong's increased reliance on Russian oil highlights global trade bifurcation.

Sanctioned Refiner Turns to Russia for Oil

Western sanctions imposed on Shandong Yulong Petrochemical for its dealings in Russian oil have led to its isolation from international suppliers, customers, and financial institutions. This has compelled the Chinese refiner to dramatically increase its purchases of Russian crude, establishing it as Moscow's primary buyer in China and underscoring the division within the global oil trade.

The sanctions, enacted by the UK and EU, quickly severed Yulong's ties with mainstream suppliers like BP and TotalEnergies, alongside foreign customers and banks. Faced with these disruptions, Yulong has been forced to turn almost exclusively to Russian oil, a consequence of Western measures aimed at curbing Russia's war revenue.

This situation marks an escalation in Western efforts against Russian oil flows, with Yulong now navigating a bifurcated market. Despite initial ambitions for global standing, the refiner's operational scope has narrowed, forcing an inward turn with expectations of further reliance on discounted Russian crude.