India and China buy Russian oil at record numbers

According to Kpler, on May 26, about 57 million barrels of Ural oil and 7.3 million barrels of ESPO crude oil in Russia’s Far East are being transported at sea. While last week, production was even higher, with about 74 to 79 million barrels. This is double the level of 27 million barrels before the Ukraine crisis in February.

Earlier this week, data from energy analysis firm Vortexa also recorded a record 62 million barrels of Russian Ural oil being transported at sea. This is three times higher than the pre-war average.

The large amount of Russian oil transported at sea shows that the global energy flow has changed markedly since the country organized a military campaign in Ukraine. The turn of the US, UK and many European companies away from Russian oil has forced Moscow to look for customers in Asia. In particular, China and India have purchased millions of barrels of oil from this country to take advantage of very high discounts.

“Some of the interested buyers in Asia are motivated by economic reasons rather than political views,” said Jane Xie, senior oil analyst at Kpler in Singapore. The expert confirmed that the total amount of Russian oil sold to China and India reached a record in April. Although the consumption of these two countries in May decreased slightly, it was still only below the record level of the month. before.

According to consulting firm FGE, if the European Union agrees to phase out the purchase of Russian oil by the end of this year, Russian oil production transported at sea will increase by 45 million to 60 million barrels due to trade flows. Trade with Asia is more vibrant.

Last month, Asia overtook Europe for the first time as the world’s largest crude oil consumer. Kpler forecasts that gap will widen this month.

However, not all of the Russian crude oil lying at sea is being bought by Asia. According to Vortexa energy strategist Clay Seigle, the amount of Ural oil floating at sea without a destination accounts for about 15%, which is also a new record for proportion. Some may be shipped to anonymous buyers, while others may not yet be sold.

“The outstanding numbers show that Russian exports are still relatively strong, but it doesn’t tell the whole story. Russian maritime oil is continuing to accumulate,” the expert assessed.

Session An (according to Bloomberg, Reuters)