BEIJING: China’s imports of crude oil from Russia hit an all-time high in June, Chinese government data showed on Thursday, with refiners continuing to snap up discounted Russian ESPO even as discounts against international benchmarks narrow.
Arrivals from Russia totalled 10.50 million metric tons in June, or 2.56 million barrels per day (bpd).
Shipments were up 44.1% from 1.77 million bpd in the same month last year, according to data from the General Administration of Customs.
Russian arrivals for the first half totalled 52.61 million metric tons, up 21.6% on the same period last year.
Shipments from Saudi Arabia totalled 7.92 million metric tons last month, equivalent to 1.93 million bpd, up 12% from last month’s 1.72 million bpd.
The figure represented a roughly 57% increase on the 1.23 million bpd shipped from Saudi in June last year.
While Western sanctions and a price cap continue to ensure that Russian crude trades a discount to global benchmarks, increasing ESPO demand from Chinese buyers alongside extensive purchases of Russian Urals grade by Indian refiners has seen this discount narrow in recent months.
China’s June crude imports soar 45.3% y/y as inventories build
June-delivery ESPO shipments were priced at a $5.50 discount to the ICE Brent benchmark, versus $8.50 against ICE Brent for shipments delivered back in March.
Chinese refiners use intermediary traders to handle shipping and insurance of Russian crude to avoid violating Western sanctions. Customs data also showed that imports from Malaysia were 1.51 million bpd in June, up 133.1% from the same period last year.
Malaysia is often used as an intermediary point for sanctioned cargoes from Iran and Venezuela.
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