Bank of China Singapore stops financing Russian oil trades: source

[SINGAPORE] Bank of China's Singapore operation has stopped financing deals involving Russian oil and Russian companies, amid concerns of western sanctions following Russia's invasion of Ukraine, said a source on Monday with knowledge of the matter.

Reuters reported last Thursday that major buyers of Russian oil were struggling to open letters of credit from Western banks to cover purchases or find ships willing to transport Russian oil.

European banks Societe Generale and Credit Suisse Group have halted the financing of commodities, it was reported on Sunday. The two banks, key financiers to commodity trading houses, are no longer providing the money needed to move raw materials such as metals and oil from Russia. 

At least two of China’s largest state-owned banks are restricting financing for purchases of Russian commodities, underscoring the limits of Beijing’s pledge to maintain economic ties with one of its most important strategic partners in the face of Western sanctions.

Western nations agreed over the weekend to exclude some Russian banks from the Swift bank messaging system and targeted the central bank’s foreign reserves. BP also moved to dump its shares in Russian oil giant Rosneft PJSC, taking a financial hit of as much as US$25 billion.

Russia’s invasion of Ukraine has roiled markets from energy to metals and grains, heaping more inflationary pressure on a global economy already hit with surging costs. REUTERS

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