Russia ramps up oil supplies to China
Russian oil companies have boosted exports of ESPO (Eastern Siberia-Pacific Ocean) grade crude to China through the port of Kozmino, with deliveries hitting a record high this month, Kommersant reported this week citing tracking data.
Shipments of Russia's ESPO grade oil from the Far Eastern port reached an all-time high of 925,000 barrels per day (bpd) in December, 85% of which is headed to China, the outlet said, citing energy analytics firm Kpler. Industry experts attributed the surge in exports of this type of crude to increased railway supplies.
Since last year, Russia has been diversifying its energy supplies in response to Western sanctions after the EU stopped accepting the country's oil transported by sea. Russian oil companies have rerouted supplies of East Siberian crude to Asia and resumed transportation by rail although the railway route has not been in demand in recent years due to high tariffs, the outlet noted.
"We are preparing to restore oil supplies for export from the first stage of the ESPO pipeline via the railway, through which only about 15 million tons of oil were previously shipped," Nikolay Tokarev, the head of Transneft, Russia's state-owned pipeline transport company, said earlier this year.
Russian oil exporters are benefiting from increased shipments of ESPO oil as this light sweet grade of crude is traded at a premium to Russia's flagship Urals blend, according to Kommersant. In addition to this, ESPO outperforms other types of oil due to the short distance it must travel to China.
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