beijingwalker
ELITE MEMBER
![](/styles/default/xenforo/ranks/FieldMarshal.jpg)
- Joined
- Nov 4, 2011
- Messages
- 65,195
- Reaction score
- -55
- Country
- Location
China Keeps Feasting on Russian Oil
Published:Thu, Jun 30, 2022
![Chinese,Yuan,Banknote,Surrounded,By,Russian,Rubles.,Concept,Of,Economic Chinese,Yuan,Banknote,Surrounded,By,Russian,Rubles.,Concept,Of,Economic](/proxy.php?image=https%3A%2F%2Fenergyintel.brightspotcdn.com%2Fdims4%2Fdefault%2Fec6c2ae%2F2147483647%2Fstrip%2Ftrue%2Fcrop%2F6240x4160%2B0%2B0%2Fresize%2F1920x1280%21%2Fquality%2F90%2F%3Furl%3Dhttp%253A%252F%252Fenergy-intelligence-brightspot.s3.amazonaws.com%252F18%252Fec%252F5f5853a242f6846b37235a489be5%252Fss2138608383-currency-chinese-russian.jpg&hash=14e194329addd854ca88ef0fb2d1adb9)
China is importing Russian crude at record rates, and its insatiable appetite for the discounted barrels looks unlikely to wane in the near term. China's imports of Russian crude could exceed 2 million barrels per day in June, and its July volumes already look strong. Chinese national oil companies (NOCs), along with several independent refiners, are most responsible for the surge in demand, snapping up almost all of the East Siberia-Pacific Ocean (Espo) crude on offer while grabbing significant volumes of Urals, too.
China imported a record 1.99 million b/d of Russian crude in May. It landed 1.13 million b/d of seaborne Russian crude in May, said Emma Li, a China-focused analyst at data analytics firm Vortexa. That means pipeline crude accounted for practically all of the other 856,000 b/d of imported Russian crude. Seaborne Russian imports arriving at Chinese ports are expected to rise by 72,000 b/d to 1.21 million b/d in June, according to ship-tracking data, Li added. Assuming pipeline imports stay at the same level as May, this would push up China’s June-arrival imports to 2.06 million b/d. This forecast could be too low since it likely does not include an Aframax Urals cargo that underwent a ship-to-ship transfer and subsequently arrived in China in June. Aframaxes typically carry around 600,000 barrels or more, equal to 20,000 b/d. China imports Russian crude through two main pipeline systems — the Espo spurs into China, with a capacity of 700,000 b/d, and pipelines running through Kazakhstan. The Kazakh pipelines have a capacity of 400,000 b/d, although a deal to send Russian crude through those lines is for 200,000 b/d. The deal was recently extended for another decade in February.
Espo and Urals account for 81% of China’s seaborne imports of Russian crude in June. Urals imports are likely to stay relatively stable in July, while Chinese players look set to extend their domination of the Espo spot market. There had been some doubts about whether China would continue buying lots of Espo after Russia's Feb. 24 invasion of Ukraine, but these have been erased. June-arrival seaborne imports of Espo are expected to drop by 23,000 b/d from May to 753,000 b/d in June, according to Li. But only around 757,000 b/d of seaborne spot Espo was available for June loading. Most seaborne Espo spot volumes arrive at Chinese ports within the same month as they are purchased, since tankers take less than a week to get from the Espo export port of Kozmino to Northeast China. June-arrival Urals imports are expected to dip by 4,000 b/d from May to 225,000 b/d, Li added. But data intelligence company Kpler sees higher June-arrival Urals volumes of 264,000 b/d, with July-arrival imports so far at 212,000 b/d. Vortexa’s count of Russian imports includes CPC Blend, which is a blend of both Russian and Kazakh crudes. CPC Blend volumes are expected to jump by 98,000 b/d from May to 133,000 b/d in June, Li said.
With Russian crude forced to sell at much cheaper prices, few Chinese players have been able to resist it in this red-hot oil market. The prices are too attractive relative to other, similar crude grades. This could make it difficult for the West to get buyers like China and India on board with any price cap scheme for Russian oil — unless it results in even cheaper prices. China’s largest refiner Sinopec, its second-largest refiner PetroChina, China National Offshore Oil Corp. (CNOOC) and Shandong independent refiners are among the likely buyers or traders of Espo arriving at Chinese ports in June, according to Kpler. And so far for July-arrival Espo cargoes, CNOOC and Shandong independents are among the likely buyers or traders, Kpler adds. For Urals, Sinopec, CNOOC and Zhenhua are among the buyers or traders of June-arrival volumes, while PetroChina and Shandong independents have bought or traded July-arrival cargoes, Kpler notes. One notable exception among China’s NOCs has been Sinochem, a trader and operator of the 300,000 b/d Quanzhou refinery. Sinochem has been avoiding Russian crude postwar, market sources report.
![www.energyintel.com](/proxy.php?image=https%3A%2F%2Fenergyintel.brightspotcdn.com%2Fdims4%2Fdefault%2Fa938c27%2F2147483647%2Fstrip%2Ftrue%2Fcrop%2F6240x3276%2B0%2B442%2Fresize%2F1200x630%21%2Fquality%2F90%2F%3Furl%3Dhttp%253A%252F%252Fenergy-intelligence-brightspot.s3.amazonaws.com%252F18%252Fec%252F5f5853a242f6846b37235a489be5%252Fss2138608383-currency-chinese-russian.jpg&hash=adfd7f28d0b9df39e6d5e3d4d1c16423&return_error=1)
China Keeps Feasting on Russian Oil
China is importing Russian crude at record rates, and its insatiable appetite for the discounted barrels looks unlikely to wane in the near term.
![www.energyintel.com](/proxy.php?image=https%3A%2F%2Fwww.energyintel.com%2Ffavicon-32x32.png&hash=af6b412387b4df394b6a8df019249f30&return_error=1)