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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

China's State Refiners Avoid New Russian Oil Deals

Aria Thomas

Apr 07, 2022 09:37

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Sinopec (NYSE:SHI), Asia's largest refiner, CNOOC (NYSE:CEO), PetroChina, and Sinochem have all stayed out of the market for fresh Russian cargoes for May loadings, according to the people, who are all familiar with the matter but spoke on condition of anonymity due to the sensitivity of the subject.


Chinese state-owned firms do not want to be perceived as openly supporting Moscow by purchasing additional volumes of oil, according to two of the people, following Washington's ban on Russian oil last month and the European Union's sanctions on Russia's top exporter Rosneft and Gazprom (MCX:GAZP) Neft.


"SOEs are circumspect because their acts may be seen as reflecting the Chinese government, and none of them wants to be singled out as a buyer of Russian oil," one of the persons said.


Sinopec and Petrochina did not respond to requests for comment. Sinochem and CNOOC did not react quickly to a request for comment.


China and Russia have become more close in recent years, notably announcing a "no boundaries" alliance in February, and China has declined to denounce Russia's behavior in Ukraine or label it an invasion.


China has consistently criticized western sanctions against Russia, yet a top official said on Saturday that Beijing is not evading sanctions on Russia on purpose.


China, the world's biggest consumer of oil, is Russia's largest customer of crude, purchasing 1.6 million barrels per day, half of which is provided through pipelines under government-to-government contracts.


According to sources, China's state-owned enterprises would honor current and long-term contracts for Russian oil but will avoid new spot purchases.


A decline in China's imports of Russian oil could prompt the country's massive state refineries to seek alternative sources, escalating global supply concerns that pushed benchmark Brent oil prices to 14-year highs near $140 per barrel in early March, following Russia's invasion of Ukraine on Feb. 24.


Brent prices have subsequently fallen below $110 after the announcement by the US and its partners to release inventories from strategic reserves. [O/R]

'PRIORITY IS GIVEN TO RISK CONTROL AND COMPLIANCE'

Prior to the Ukraine crisis, Russia provided 15% of China's oil imports, half through the East Siberian and Atasu-Alashankou pipelines and the remainder via tankers based in Russia's Black Sea, Baltic Sea, and Far East ports.


Unipec, Sinopec's trading arm and a major Russian oil customer, has informed its worldwide teams in recent weeks at regular internal meetings about the dangers associated with dealing with Russian oil.


"The message and tone are clear - risk management and compliance take precedence above revenues," one individual informed on the discussions said.


"While Russian oil is significantly reduced, there are several complications, such as acquiring shipping insurance and payment snags."


Another source with a refinery that processes Russian crude on a regular basis said that his unit was instructed by Unipec to locate a substitute in order to maintain normal operations.


"With the exception of shipments that came in March and are scheduled to come in April, there will be no more Russian oil," this person said.


According to traders and shipping statistics, Unipec loaded 500,000 tonnes of Urals from Russia's Baltic ports in March, the greatest amount in months. The Urals were provided on spot and via a Rosneft export deal that Unipec won for loadings between September 2021 and March 2022.


Its most recent Urals deals involve two April-loading shipments totaling 200,000 tonnes from Russian producer Surgutneftegaz, according to two traders familiar with the transactions.


In comparison, India has reserved at least 14 million barrels, or approximately 2 million tonnes, of Russian oil since Feb. 24, compared to nearly 16 million barrels for the entire year of 2021, according to Reuters calculations.


Other state buyers, including PetroChina, CNOOC, and Sinochem, have reportedly avoided Russia's ESPO blend for May loading.


Sinopec is experiencing payment difficulties even for previously signed agreements, as risk-averse state banks seek to reduce their exposure to Russian oil-related transactions, the second person added.

DEALS ARE KEPT 'UNDER WRAPS' BY TEAPOTS

Sanction fears have prompted some independent refiners known as teapots to disappear. They were once a vibrant group of customers consuming roughly a third of China's Russian oil imports.


"Trading in ESPO was extremely slow and secretive. Certain transactions are taking place, but specifics are being withheld. Nobody likes to be seen in public purchasing Russian oil "According to a frequent ESPO dealer.


To keep oil flowing, these agile refiners are experimenting with alternate payment methods such as cash transfers, payment upon delivery of cargo, and the use of Chinese money.


In May, Rosneft, Surgutneftegaz, and Gazprom Neft, as well as independent producers represented by Swiss trader Paramount Energy, are set to transport a record 3.3 million tonnes of ESPO from Kozmino port.

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