China's Hengli Petrochemical has cancelled millions of barrels of crude oil purchases, including cargoes from West Africa, as U.S. sanctions continue to disrupt the operations of one of the country's largest independent refiners.
According to a Reuters report, Hengli has scrapped deals covering at least 6 million barrels of crude oil, a rare move in the global oil market where refiners seldom cancel shipments after contracts have been signed.
The cancellations include 2 million barrels of West African crude already delivered to third-party storage facilities in eastern China, as well as 4 million barrels of Middle Eastern crude scheduled for delivery in July. One of the Middle Eastern cargoes has since been resold, according to one of the sources.
The development comes only weeks after reports that Hengli had begun sourcing crude from West Africa and the Middle East in an apparent effort to reduce its dependence on Iranian oil and improve its standing with U.S. authorities.
Sanctions continue to bite
