According to Bloomberg, China’s oil refiners are quietly buying cheap crude from China Russiaas the country’s supply continues to “find its way” into the mainland market.
Unlike Indian refiners, which have offered some tender measures to buy Russian crude, traders told Bloomberg that China’s state-owned oil processors are negotiating. separately from the seller. The country’s independent refiners are also quietly buying.
In recent times, most businesses and countries have avoided Russian crude oil after President Putin launched a military campaign in Ukraine for fear of damaging its reputation or violating Western sanctions. China’s independent refiners, which account for a quarter of the country’s oil processing capacity and are mainly based in Shandong province, have purchased some of the ESPO oil imported from the eastern Russian port of Kozmino. .
Recent ESPO purchases by Chinese independent refiners – known as teapots, are ordered for pick-up in May, and Chinese oil processors are constantly sourcing Russian oil, according to information disclosed by anonymous traders. ESPO is the preferred oil because it can be transported to smaller ports where large ships cannot be loaded and unloaded, from shorter distances, helping to reduce costs.
Some teapots are discussing with traders about payment options and looking for ships to transport crude oil at reasonable prices. In addition, they are also considering buying Ural crude oil. Sources close to the source added that Ural barrels of oil, which are processed by state-owned enterprises, will be delivered in June.
The purchase and sale of Russian oil are almost all avoided by businesses after conflicts with Ukraine. Good-faith buyers and sellers must hold negotiations behind closed doors after a number of tenders close without a buyer. Shell Plc has come under heavy criticism recently for its announcement to buy Ural crude not long after the Russia-Ukraine conflict began.
Another Russian crude, Sokol, is also set to be shipped to India. According to these traders, Indian Oil Corp. and Hindustan Petroleum Corp. state-owned company purchased May delivery of Sokol oil from ONGC Videsh Ltd. – a shareholder of the Sakhalin-I project. Oil shipments will be delivered from the De-Kastri terminal.
Sakhalin Oil and Gas Development Co. of Japan – known as SODECO, also has a stake in Sakhalin-I but declined to comment on its future Sokol crude oil exports. Some buyers in North Asia are likely to receive the top orders placed in May, traders revealed.
So far, India has bought at least 13 million barrels of Ural oil since the end of February, according to data compiled by Bloomberg. Indian Oil purchased an additional 3 million barrels in its most recent tender. Bloomberg estimates based on asset tracking data show that Russian oil production shipped to the country will average about 128,000/ton per month in 2021. Ural oil is shipped from ports in the Baltic and Sea Black.
Refer to Bloomberg
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