Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 25 July 2022 Author: Grzegorz Kuczyński
China Faces Indian Competition For Russian Oil
It seems that the time when Russia sold large amounts of crude to China is slowly coming to an end. But Moscow has little cause for concern as another Asian giant is next to claim Russian crude supplies.
Russia remained China’s top supplier for the second month in a row, surpassing Saudi Arabia, as Chinese buyers, including state-run Sinopec and Zhenhua Oil, cashed in on lower-priced supplies. Imports of Russian oil, including supplies pumped via the East Siberia Pacific Ocean pipeline and seaborne shipments from Russia’s European and Far Eastern ports, totaled 7.29 million tons (1.77 million bpd) in June, up 9.5 percent from a year ago, according to data from the Chinese General Administration of Customs. That was over 2 million tons more than China received from Saudi Arabia, its traditional main supplier. The world’s second-biggest economy imported about 8.42 million tons (2 million bpd) of oil from Russia in May, a 55 percent rise from May 2021 and a 25 percent rise from April 2022. China reduced its oil supplies from Russia in recent weeks, a sign that the Asian energy market might not be able to take as much Russian crude as previously expected. China was possibly seeking to replenish its strategic crude stockpiles with cheap Russian oil, which is why it ramped up supplies and then saw a sharp decrease. However, according to Bloomberg, India has ramped up purchases of crude from Russia’s far east, a grade that’s typically favored by Chinese oil refiners. Four cargoes carrying Russian oil are en route for India, with two tankers heading for Paradip port on the east coast, where a refinery operated by Indian Oil Corp. is located, according to data compiled by Bloomberg. The trade is typically not attractive to Indian buyers due to the long distance from the Russian loading port of Kozmino and because ESPO crude cargoes are usually transported in Aframax vessels that carry between 80,000 and 120,000 tons of oil. However, the cheaper price compared with other grades from West Africa and Brazil is likely to have prompted the buying, according to traders.
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