Tankers carrying a total of up to 12 million barrels of crude oil are either en route or close to China in East Asian waters, waiting for buyers in the world’s top crude importer, as India is pulling back.
Five of these tankers signal ‘for orders’ or ‘China for orders’ as their status, per data intelligence firm Kpler cited by Bloomberg on Friday.
‘For orders’ typically means the cargo doesn’t have a destination port or buyer.
Six other vessels are en route to offshore Singapore and Malaysia, popular ship-to-ship transfer points in Asia, while another four are idling offshore
Malaysia, China, and Russia’s Far East, without indicating a specific destination, according to Kpler’s data.
The piling of tankers with Russian crude in East Asian waters suggests that sellers are looking to offload the cargoes in China after several Indian refiners temporarily halted purchases of Russian oil following the U.S.-India trade deal.
In another sign that China is now the ‘safest’ destination for Russia’s oil, Russian crude is being offered in China at widening discounts to attract Chinese refiners.
This week, the discount of the ESPO blend that Russia ships from the Kozmino port in the Far East widened to almost $9 per barrel to ICE Brent, up from the $7–$8 a barrel discount of the past months, trade sources told Reuters earlier this week.
Discounts for Russia’s flagship Urals crude grade shipped from Russia’s Baltic Sea port, and mostly to India, have already widened to $12 per barrel below Brent and could widen further, the traders told Reuters.
The discounts started to widen this week 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.
With Indian refiners still waiting for guidance on how to proceed with the oil trade with Russia, sellers of Russia’s crude are looking to attract additional purchases in China with hefty discounts of the Russian blends to Brent.
By Tsvetana Paraskova for Oilprice.com
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