Report shows that China is enjoying a windfall from the purchase of Russian oil, as they reap the benefits of a plunge in European buying, and tumbling prices for Russian oil.
According to data from the Chinese General Administration of Customs, China’s imports of crude oil and coal imports from Russia exploded in August. China is Russia’s largest oil buyer, especially now that most of the western world has sanctioned Russian energy.
The report said Russian imports rose as Chinese independent refiners extended purchases of discounted Russian supplies that elbowed out rival cargoes from West Africa and Brazil. But despite the full price, imports from Saudi Arabia rebounded last month to 8.475 million tonnes, or 1.99 million bpd, 5% above the year ago levels, and just inching out Russia for the top spot.
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Saudi Arabia also remains the biggest supplier on a year-to-date basis, shipping 58.31 million tonnes of oil from January to August, down 0.3% on the year, versus 55.79 million tonnes from Russia, which was up 7.3% from the year ago period.
In total, China crude oil imports in August fell 9.4% from a year earlier, as outages at state-run refineries and lower operations at independent plants caused by weak margins capped buying.
The strong purchases of Russian oil continued to weigh on competing supplies from Angola and Brazil, which fell in August by 34% and 47% year-on-year, respectively. Customs reported no imports from Venezuela or Iran last month. State oil firms have shunned purchases since late 2019 for fear of falling foul of secondary U.S. sanctions, although many still engage in illicit trade which is not disclosed on the books.
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The data said one such company is defense-focused China Aerospace Science and Industry Corp (CASIC) which moved 25 million barrels of Venezuelan crude into China since late 2020, which Chinese customs does not report.
Tuesday’s customs data also showed imports from Malaysia, often used as a transfer point in the past two years for oil originating from Iran, Venezuela and more recently Russia, nearly doubled from a year earlier, to 3.37 million tonnes, or 794,000 bpd.
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