“China increased purchases of Russian oil amid Trump’s threats to India – BloombergChinese refineries increased purchases of Russian Urals oil, taking advantage of India’s refusal of preferential batches due to Washington’s increased trade tariffs. Urals exports to China almost doubled in August, while they significantly decreased to India.
”, — write: unn.ua
DetailsAlthough China is the largest importer of Russian oil, it typically buys it from the Far East. However, in August, supplies of Urals oil, which is shipped from Baltic and Black Sea ports, amounted to almost 75,000 barrels per day. This is almost double the year-to-date average of about 40,000 barrels, according to Kpler. At the same time, exports to India this month fell to no more than 400,000 barrels per day compared to an average of 1.18 million.
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“Overall, Chinese refineries are currently in a comfortable position to continue buying Russian oil, unlike Indian ones,” said Jiangnan Sun, an analyst at Energy Aspects Ltd. Urals oil, supplied from western Russia, remains competitive compared to alternative Middle Eastern grades, Sun added.
The global oil market is focused on changes in global flows, as US President Donald Trump intensifies diplomatic efforts to achieve a cessation of the war in Ukraine. As part of these efforts, Washington has doubled tariffs on all oil imports by India to punish the country for buying Russian oil, although it has not yet taken similar measures against China amid a truce with Beijing. Asian states are major buyers of Russian oil.
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The different approaches that gave Chinese refineries the opportunity to buy became apparent in recent days. Meanwhile, White House trade adviser Peter Navarro called India’s oil purchases “opportunistic and extremely disruptive,” while acknowledging that the US cannot go further with China without harming itself.
“One thing is for sure: Trump will not do what he knows he cannot achieve,” said Mukesh Sahdev, head of commodity markets at Rystad Energy A/S. “By pressuring India, he certainly has achievements and can influence the situation, but by pressuring China? Unlikely.”
Chinese refineries, in Asia’s largest economy, have likely already purchased 10 to 15 cargoes of Urals oil for October and November delivery, exceeding their usual volumes, according to Kpler and Energy Aspects data.
“I wouldn’t be surprised if the Chinese buy more Urals cargoes for November delivery in the coming days,” if oil prices remain attractive, said Muyu Xu, a senior oil analyst at Kpler.
Recently, this grade was offered at a premium of $1 per barrel against Dated Brent, and no further discounts were observed after increased interest from Chinese refineries, traders reported.
Currently, at least two tankers carrying Urals oil, each with a capacity of 1 million barrels, are waiting off the coast of China, and more are expected in the coming weeks, according to tracking data collected by Bloomberg. The vessels – Georgy Maslov and Zenith – are idling near Zhoushan. This is the base of Zhejiang Petroleum & Chemical Co., also strategic storage facilities.
Indian refiners remain on the sidelines, although, according to traders, they are receiving and considering offers for Urals oil.
Excess Russian barrels “need to be removed, and China can only take these barrels to storage,” Sahdev said, adding: “Without purchases from China, Russian oil may start to get cheaper to attract new buyers.”
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