Chinese demand for Russian oil drops suddenly – Reuters
Deliveries of Russian crude to China almost halved in June from the previous month, as refiners lacked import quotas, Reuters reported on Monday, citing tracking data and market sources.
China-bound cargos with Russia’s flagship Urals oil from Baltic and Black Sea ports fell by 50% from June 1 to June 19, compared to the same period in May, and averaged 212,000 barrels per day (bpd), down from 414,000 bpd loaded last month, according to Refinitiv Eikon and Reuters calculations.
Crude analysts attributed the decline in imports to lower demand from Chinese independent refineries related to a shortage of import quotas on oil.
“In May, when June-loading cargos of Urals were trading, none of the private refineries in China knew the volumes of their import quotas. Having no quotas, they waited, and now they are able to buy July-loading barrels,” said Viktor Katona, lead crude analyst at Kpler.
At the same time, the latest data released by the Chinese General Administration of Customs on Tuesday showed that Beijing’s oil imports from Russia hit a record high in May, as private refiners continued to snap up sanctioned ESPO and Urals crude at discounts.
Russian crude shipments to China surged by 15.3% last month on an annual basis and jumped by 32.4% in monthly terms, reaching 2.29 million bpd, up from the 1.73 million bpd delivered in April.
Moscow again overtook Saudi Arabia as China’s top oil supplier in May as the kingdom exported 1.72 million bpd last month in a 16% month-on-month decrease, figures showed.
The surge in Russian oil imports in May was mainly due to increased demand from China’s independent refineries, analysts say. However, major players such as Hengli Petrochemical also contributed to the uptick.
In May, a 400,000-barrel-per-day refinery owned by Hengli in the northeastern city of Dalian received its first Urals cargo of 730,000 barrels in addition to a total of 3.71 million barrels of ESPO, according to ship tracking data.
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