Indian refiners have stopped buying crude oil from Chinese sellers, according to a Reuters report that cited unnamed sources.

The move, according to the report, comes as a result of new legislation passed by Indian lawmakers that aims to restrict imports from the country’s neighbors after bilateral relations with China deteriorated following a border clash that involved fatalities on the Indian side.

Earlier this month, Indian refiners stopped chartering Chinese-owned or China-flagged tankers for oil and fuels, according to a Bloomberg report, also citing unnamed sources.

Vessels owned or registered by China were prohibited from taking part in tenders for oil tankers that import crude oil into India or export refined petroleum products out of India, Bloomberg’s sources said, adding that Indian state oil companies had plans to ask that oil traders did not use Chinese vessels for delivering oil to them.

Chinese-Indian relations have never been warm, to say the least, because of a long-standing dispute regarding where exactly the border between the two should pass. Flare-ups have not been infrequent, but the latest one that resulted in the death of 20 Indian soldiers has become the most serious in five decades.

The oil import move is the latest in a series of steps taken by India in response to the increased bilateral hostility. In late June, before the import-restricting legislation passed, India’s government said it would be checking power equipment coming from China, citing cybersecurity concerns. The tanker restrictions then followed, and ultimately the reported suspension of crude imports followed that.

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The new export-from-neighbors legislation, Reuters explains, requires that any seller wishing to take part in an oil tender coming from Indian refiners must register with a department in India’s ministry of commerce. Even though China does not export crude to India directly, Chinese trading firms are among the biggest oil traders globally.

By Irina Slav for Oilprice.com

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