BEIJING/SINGAPORE: Russian crude oil arrivals in China fell in September from a peak level set in the prior month, following Moscow’s export cuts and the rising of oil prices, but Russia still maintained its spot as China’s top oil supplier.
China’s imports from Russia - including supplies via pipelines and seaborne shipments - totalled 8.74 million metric tons, or 2.13 million barrels per day (bpd) according to data from the General Administration of Customs on Friday.
Shipments stepped down month-on-month from August’s level of 2.48 million bpd, which was at the time the second-highest level on record.
Cumulative Russian arrivals over the first nine months of the year were up 24% from the same period last year, totalling 79.94 million tons.Shipments from Saudi Arabia totalled 6.57 million tons, or 1.6 million bpd, down 13% from a year earlier and down from 1.89 million bpd in August.
Saudi Arabia has been raising its official selling prices for Asian clients since June, for cargoes loaded from July onwards, prompting some Chinese refiners to ask for lower supply and seeking for cheaper alternatives from the spot market.
Riyadh’s unilateral 1 million bpd output cuts are to continue to the end of the year, with the prospect of increased oil output under a US-brokered deal to normalise relations between Saudi Arabia and Israel looking increasingly distant following the recent outbreak of conflict between Israel and Hamas.
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Moscow has already pledged to extend export cuts of 300,000 bpd until the end of the year.
This tightened supply, combined with strong demand from Indian refiners, has seen the discount on sanctioned Russian crude narrow consistently in recent months.
Rising prices were likely to deter Chinese independent refiners, who have been the main customers for sanctioned Russian crude, analysts said ahead of the data.
ESPO-grade shipments for September delivery were priced at around a $1.8 per barrel discount to the ICE Brent benchmark, versus $4 for August delivery cargoes and $8.50 for shipments delivered in March, according to trading sources.
Chinese refiners use intermediary traders to handle shipping and insurance of Russian crude to avoid violating Western sanctions.
Imports from Malaysia, used as a trans-shipment point for sanctioned cargoes from Iran and Venezuela, were up 28% from a year earlier to 5.21 million tons, or 1.27 million bpd in September, the third-largest supplier after Russia and Saudi Arabia.
Despite deepening geopolitical tension between Beijing and Washington, China increased oil imports from the US amidst the favourable prices, bringing in 1.07 million tons last month, with the year-to-date volume of shipments doubled last year’s tally.