Russia maintained its position as China’s top oil supplier in March, Chinese government data showed on Friday, as buyers continued to snap up sanctioned ESPO and Urals shipments at steep discounts.
Arrivals from Russia totalled 9.61 million tonnes in March, or 2.26 million barrels per day (bpd), up 50% from 1.50 million bpd in the corresponding 2022 period, according to data from the General Administration of Customs.
This compared to 1.94 million bpd over January and February, and took the total volume of Russian oil for the first quarter to 25.29 million tonnes.
Imports of Saudi crude totalled 8.90 million tonnes in the March period, equivalent to 2.10 million bpd, up from 1.61 million bpd a year earlier.
This represented an increase on January and February’s rate of 1.72 million bpd, and took total Saudi supply for the first quarter to 22.82 million tonnes.
Saudi Arabia was China’s top supplier in 2022, selling 87.49 million tonnes of crude during the year, equivalent to 1.75 million bpd.
Western sanctions and a price cap on seaborne Russian crude following Moscow’s invasion of Ukraine have limited the buyer pool for Russian supply, leading Russian crude to trade at discounts to international benchmarks.
Prices for March-delivery Russian ESPO cargoes, which load at ports in eastern Russia, hit as low as $8.50 below the ICE Brent benchmark, before rebounding to around $8 below Brent, according to trading sources.
Chinese refiners use intermediary traders to handle shipping and insurance of Russian crude to avoid violating Western sanctions.
Month-on-month growth was likely to come “mainly from UAE and Saudi on strong Chinese buying of Upper Zakum since January and possibly more nomination of term contracts,” said Jianan Sun, an analyst at consultancy Energy Aspects, speaking ahead of the data release.
Customs data also showed that imports from Malaysia were 1.07 million bpd over the period, up 140.1% from the same period last year. Malaysia is often used as an intermediary point for sanctioned cargoes from Iran and Venezuela.
Source: Reuters (Reporting by Andrew Hayley; Editing by Sonali Paul)