Russia’s ESPO Blend oil exports from its Far East Kozmino port in July are set to hit a record high of 3.9 million metric tons (943,550 barrels per day) in July while the grade’s prices are firming on recovering Chinese demand, several trade sources said.

Russia is maximising its eastern oil exports with China becoming a main outlet for Russian oil in the wake of Western sanctions on Russian energy.

ESPO Blend exports from Kozmino are expected to rise to 3.9 million tons in July from about 3.4 million tons (some 850,000 bpd) planned for this month, two sources said.

Spot discounts for ESPO Blend have been narrowing this month, supported by firm demand from Chinese independent refiners, three other sources said.

Demand from Indian refiners has also remained firm, one of the sources said.

The average discount for July-loading cargoes of ESPO Blend narrowed to about 60-70 cents per barrel to ICE Brent on a delivered ex-ship (DES) China basis, they said.

June-loading cargoes for Chinahad traded at discounts of between 80 cents and $1 per barrel, the sources said.

One of the sources said Russian ESPO crude prices are stabilising as the arbitrage window for alternative supplies from the Atlantic Basin is closed after Brent’s premium to Middle East Dubai quotes rose.

In May ESPO Blend exports rose to 920,000 bpd weighing on the grade’s differentials which eased significantly.
Source: Reuters (Reporting by Florence Tan in SINGAPORE and Reuters reporters in MOSCOW; editing by Jason Neely)