China is actively buying Russian oil amid India’s refusal
19 августа 09:06
Chinese refineries are increasing their purchases of flagship Russian oil. This way, they get discounted shipments that India refused to buy because of Washington’s increased trade tariffs. This is reported by «Коммерсант Украинский» with reference to Bloomberg.
Although China remains the largest importer of Russian oil, it usually receives supplies from the Russian Far East. However, in August alone, deliveries of Urals crude oil loaded in Baltic and Black Sea ports amounted to almost 75 thousand barrels per day. This is almost twice the annual average of 40 thousand barrels, according to Kpler analysts.
At the same time, exports to India fell to 400 thousand barrels per day this month, compared to an average of 1.18 million barrels.
«In general, Chinese refineries are currently in a comfortable position to continue purchasing Russian oil, unlike Indian refiners,»
— said Jianan Sun, an analyst at Energy Aspects Ltd.
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US diplomatic pressure
The global oil market is focused on shifting global flows as US President Donald Trump intensifies diplomatic efforts to resolve the war in Ukraine. As part of this initiative, Washington has doubled duties on all Indian imports, punishing India for purchasing Russian oil, although it has not yet taken retaliatory measures against China amid a trade truce with Beijing.
The different approaches have given Chinese refiners an opportunity to buy. Last Friday, Trump said he would refrain from raising tariffs on Chinese goods because of the country’s purchases of Russian oil, citing progress with Russian President Vladimir Putin to end the war.
Meanwhile, White House trade adviser Peter Navarro characterized India’s purchases as «opportunistic and deeply destructive,» while acknowledging that the US cannot go further with China without hurting itself.
Market situation
Refiners in China, Asia’s largest economy, have likely purchased 10 to 15 shipments of Urals for delivery in October and November, more than their usual consumption, according to Kpler and Energy Aspects.
The crude was recently offered at a $1 per barrel premium to Dated Brent without further discounts due to increased interest from Chinese refiners.
Currently, at least two Urals tankers — each with a capacity of 1 million barrels — are waiting off the coast of China, with more expected in the coming weeks. The Georgy Maslov and Zenit vessels are idle off Zhoushan.
Indian refiners are staying away for now, although they are receiving and considering offers for Urals.
«Excess Russian barrels must be exported, and only China can take these barrels. Without China’s purchases, Russian oil may start to decline in price to attract new buyers,»
— said Mukesh Sahdev, Head of Commodity Markets at Rystad Energy A/S.
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