Russia takes the lead in China’s oil market, dethroning Saudi Arabia
China’s largest oil supplier shifted from Saudi Arabia to Russia in the first two months of 2023, as Chinese consumers purchased Russian oil at discounted rates despite Western sanctions.
Chinese government data from the General Administration of Customs revealed that imports from Russia increased by 23.8% to 15.68 million tonnes, or 1.94 million barrels per day, surpassing Saudi Arabia’s 13.92 million tonnes, or 1.72 million barrels per day.
In 2017, Russia was China’s second-largest crude supplier at 86.2 million tonnes, while Saudi Arabia was the largest in 2022 with 87.49 million tonnes.
The price difference of Russian crude compared to global benchmarks has benefited independent Chinese refiners in Shandong province, though private Indian refiners have entered the ESPO market, reducing the price advantage.
State-owned Sinopec and PetroChina resumed purchasing Russian Urals level cargoes in February, exported and insured using middlemen traders to avoid breaking Western sanctions.
Imports from Malaysia also increased by 144.2% to 0.65 million barrels per day, often used as a middleman for cargoes from Iran and Venezuela, subject to sanctions.