A jump in China’s crude oil imports from Russia is more than compensating the withdrawal of the Indian refiners from spot Russian purchases, according to tanker-tracking data compiled by Bloomberg.
So far in February, deliveries of Russia-origin cargoes at Chinese ports have averaged 2.09 million barrels per day (bpd), up from an average of 1.72 million bpd in the full month of January and 1.39 million for December, the data showed.
For Russia, the hike in Chinese purchases of its crude has more than offset the loss of a major share of the Indian market following the U.S. pressure on New Delhi to ditch Russian oil imports.
Earlier this week, data from Vortexa and Kpler showed that China’s oil imports from Russia are on track for all-time high of more than 2 million bpd this month as India is withdrawing from Russian spot purchases and supply is now heavily discounted for Chinese independent refiners.
China is set to import 2.07-2.08 million bpd of oil from Russia this month, according to data from Vortexa and Kpler cited by Reuters.
The figure would be a new record high and significantly higher than the 1.7 million bpd estimated imports of Russian oil to China in January.
The U.S. sanctions on Russian producers Rosneft and Lukoil, and the U.S. pressure on India to cut back, or as the White House wants, to halt, imports of Russian oil, have dragged discounts for Russian crudes to the widest in years.
The flagship Russian grade Urals, which was previously flowing to India, is now priced at between $9 and $11 a barrel below benchmark ICE Brent for January/February deliveries to China, traders tell Reuters.
Discounts widened further early this month after the U.S. and India reached a trade deal, in which lower U.S. tariffs for Indian goods are dependent upon India slashing its purchases of Russian oil.
By Tsvetana Paraskova for Oilprice.com
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