China takes advantage of the opportunity to buy cheap Russian oil as India reduces purchases

Thanh Hà |

Refineries in China have stepped up purchases of Russian oil, seizing the opportunity to buy discount shipments that India abandoned when Washington imposed tariffs on New Delhi.

China is Russia's largest crude oil importer, but it often tends to import from Russia's Far East.

As of August, Ural oil shipments - dispatched from Baltic and Black Sea ports - reached nearly 75,000 barrels per day.

This is nearly double the average of about 40,000 barrels since the beginning of the year, according to Kpler data and analysis platform.

In contrast, Russian oil exports to India fell below 400,000 barrels per day in August, compared to an average of 1.18 million barrels.

"In general, Chinese refineries are in a favorable position to continue importing Russian oil, in contrast to Indian refineries," said Mr. Sun Jianan - an analyst at Energy Aspects.

Ural oil - transported from western Russia - is still competing with alternative oils from the Middle East, Mr. Sun pointed out.

The global oil market is focusing on changes in global flows as US President Donald Trump stepped up diplomatic efforts to mediate the end of the conflict in Ukraine.

In this effort, Washington has doubled tariffs on all imports from India as a punishment for the country having purchased Russian oil but has not taken similar action against China as the two countries have signed a trade truce.

China and India are the largest buyers of Russian oil.

Different approaches, which give Chinese refineries the opportunity to buy oil, have been clearly demonstrated in recent days.

On August 15, Mr. Trump said he would postpone tax increases on Chinese goods because the country bought Russian oil because there had been progress from Russia in efforts to end the conflict in Ukraine.

Meanwhile, White House trade adviser Peter Navarro called India's purchase of Russian oil "a benefit and a profound harm".

According to Kpler and Energy Aspects, refineries in China may have so far purchased between 10 and 15 Ural oil lots delivered in October and November, more than the usual oil consumption.

Ms. Xu Muyu, senior crude oil analyst at Kpler, pointed out: "I would not be surprised if China will buy more Ural oil for November delivery in the coming days" if Ural oil prices remain attractive.

Currently, at least two tankers, the Ural Georgy Maslov and Zenith - each with a capacity of 1 million barrels - are waiting off the coast of China, and more are expected in the coming weeks.

The Georgy Maslov and Zenith ships are anchored near Chu Son. It is the location of Zhejiang Petroleum & Chemica's facility and is also near strategic warehouses.

Thanh Hà
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