Russia has become China’s largest oil supplier, thanks in part to the steep discounts that Russian oil is currently available with.
Data from the General Administration of Customs in China reveals that some 15.68 million tonnes of Russian oil landed in China in January and February. This is the equivalent of 1.94 million barrels per day and represents a 23.8 percent increase from the corresponding 2022 period.
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This increase in oil sales means that Russia left Saudi Arabia behind in second place as China’s largest oil supplier. In January and February, some 13.92 million tonnes of crude oil from Saudi Arabia made their way to China, or 1.72 million barrels per day, a decrease from the 1.81 million a year earlier.
Reuters notes that many independent Chinese refiners are snapping up Russian oil at deep discounts due to Western sanctions and a price cape on seaborne Russian crude that was introduced after Vladimir Putin’s invasion of Ukraine. Russian crude oil landing in Shandong ports was purchased in January at a discount of around $8 compared to international benchmarks.
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State-owned refiners Sinopec and PetroChina resumed their purchases of Russian Urals oil in February having briefly paused purchases in late 2022. Chinese refiners are able to avoid violating Western sanctions for the purchase of Russian oil by using intermediary traders to handle the shipping and insurance of crude.
Iraq was the third-largest exporter of oil to China in January and February with 9.62 million tonnes, a 4% decline from last year. Oil imports from the United Arab Emirates increased by 11.5% to 6.58 million tonnes and soared by 46% from Brazil to 6.27 million tonnes.
