Imports of Russian crude to China are up 52.4% from last year
For the second time this year, Russia supplied more crude oil to China than Saudi Arabia. Crude imports from Russia increased 53.4% year-over-year in April to reach 1.17 MMBOPD, topping the previous record of 1.13 MMBOPD in December, Reuters reported.
April imports from Saudi Arabia fell 21.8% from a year ago to 1.0 MMBOPD, data showed, but were still up from 936.5 MBOPD in March.
The increased demand for oil from Russia likely came from China’s “teapot” refiners. The small, independent refiners are increasing the nation’s overall demand as they attempt to take part in a market traditionally dominated by state-owned companies. The teapot refiners are storing oil they purchased earlier at lower flat prices, a trader with a Chinese company said.
Unipec, the trading arm of state-owned oil refiner Sinopec, also purchased large volumes of Russian crude for April delivery, a second trader said.
Demand for Russian crude is expected to shrink after June, however. Increased oil prices are expected to squeeze refinery margins.
China’s independent refiners have been regular clients for the Russian ESPO grade due to low transportation costs and small cargo sizes. Saudi Aramco appears to want in on this growing market, selling its first spot cargo to a teapot refinery in April.
The two petro-states have been vying for market share in China and Europe since the fall in oil prices. Russia is increasingly looking at oil and gas deals with China and India, while Saudi Arabia picks up Russia’s lost market share in Europe.
Shipments from Iran fell 5.13% in April from last year to 671.2 MBOPD. April volumes still represented 14% growth from March, however.
Iraqi shipments to China rose 11.3% in April year-over-year to about 764.8 MBOPD. For the first four months of the year versus a year ago, imports from Iraq were up 10.2%.
