After several months of blackouts and petroleum shortages in various provinces China wants to keep more oil from Daqing for domestic use. New tax policies have also made sales more expensive for exporters.

Furthermore, the Japanese consortium, made up of refiners like Nippon Oil Corp and Idemitsu Kosan Co, wanted around 1.85 million tonnes of Daqing annually for this year and the next. The 500,000 tonnes on offer per month probably was not what they were looking for.

According to an unnamed Tokyo-based source, "China has stopped loading Daqing oil for Japan for January after the talks broke down at the end of last month. It won't be exported to Japan again based on long-term contracts."

Daqing crude - since 2001- has accounted for 1.5% of Japan's crude imports.