Published on: 2025-10-25

Intelligence Report: How Might China Respond To US Sanctions On Russia’s Biggest Oil Companies – Globalsecurity.org

1. BLUF (Bottom Line Up Front)

China is likely to continue importing Russian oil despite US sanctions, using intermediaries to circumvent direct dealings. This hypothesis is supported by historical patterns and current practices. Confidence level: Moderate. Recommended action: Monitor intermediary networks and enhance enforcement of secondary sanctions to deter circumvention.

2. Competing Hypotheses

1. **China will circumvent sanctions through intermediaries**: This hypothesis suggests that China will continue to import Russian oil by leveraging intermediaries, thus avoiding direct violations of US sanctions. This is supported by past behavior and statements from Chinese officials opposing unilateral sanctions.

2. **China will significantly reduce Russian oil imports**: This alternative posits that China will reduce imports to avoid potential penalties, aligning with international norms. This is less supported due to China’s heavy reliance on Russian oil and historical resistance to US sanctions.

3. Key Assumptions and Red Flags

– Assumption: China can effectively use intermediaries without facing significant penalties.
– Red Flag: The effectiveness of US secondary sanctions is uncertain and could influence China’s decision-making.
– Blind Spot: Potential changes in China’s domestic energy policy or unforeseen geopolitical shifts.

4. Implications and Strategic Risks

– Economic: Continued Chinese imports could undermine the effectiveness of US sanctions, impacting global oil prices.
– Geopolitical: This could strain US-China relations and complicate diplomatic efforts regarding Russia.
– Cyber: Increased reliance on intermediaries may expose supply chains to cyber threats.
– Psychological: Perception of US sanctions’ ineffectiveness could embolden other nations to defy similar measures.

5. Recommendations and Outlook

• Enhance intelligence gathering on intermediary networks to better enforce secondary sanctions.
• Engage diplomatically with China to negotiate compliance with international norms.
• Scenario Projections:
  • Best: China complies with sanctions, reducing Russian oil imports significantly.
  • Worst: China openly defies sanctions, leading to increased geopolitical tensions.
  • Most Likely: China continues imports via intermediaries, maintaining a cautious stance.

6. Key Individuals and Entities

– Guo Jiakun: Chinese Foreign Ministry spokesperson.
– David Goldwyn: Special envoy for international energy affairs.
– Andrea Clabough: Fellow at the Atlantic Council.
– Companies: PetroChina, Sinopec, CNOOC, Zhenhua Oil, Rosneft, Lukoil.

7. Thematic Tags

national security threats, economic sanctions, energy security, geopolitical strategy