A supertanker carrying 2.1 million barrels of Russia’s Far Eastern ESPO crude grade has been anchored near China for days in what traders say is an unusual pattern that could suggest weaker demand in the Asian market.
The Big Star supertanker loaded ESPO from three smaller vessels near Russia’s Zarubino port in the Far East earlier this month and headed to China’s port of Jieyang in the southern province of Guangdong, according to ship-tracking data from LSEG cited by Reuters.
However, the Big Star has been stationed at anchor for nearly a week near Taiwan, the data showed.
Traders say ESPO is rarely held in floating storage as it is one of the favorite blends of Chinese refiners. It’s also unusual for ESPO cargoes to be part of ship-to-ship (STS) transfers, they told Reuters.
One of the trade sources suggested that the oil aboard the Big Star was placed too late for sale and didn’t attract buyers in the window for selling an oil cargo in the Asian markets, which typically occurs more than a month before loading.
Some Chinese refiners are now more apprehensive of potential secondary sanctions in their trades with Russian crude oil.
But last month, Sinopec, the biggest refiner in Asia by processing capacity, bought its first ESPO blend from Russia for May loading since the February loading plans, after refraining from buying the grade for loading in March and April until it assesses the risk from the U.S. sanctions.
While earlier this year, state oil firms in China either halted or reduced Russian oil volumes, the independent refiners in China, which prefer to buy cheaper Russian and Iranian oil, picked up the slack.
Chinese refiners are also increasingly careful in trade with Iranian oil, after the U.S. continues to ratchet up sanctions pressure under the ‘maximum pressure campaign’ on the Islamic Republic.
By Charles Kennedy for Oilprice.com
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