China began importing record quantities of oil from Russia

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China began importing record quantities of oil from Russia

Chinese imports of crude oil from Russia jumped to record levels in May, while Saudi Arabia lost its status as China’s main supplier. Imports of Russian oil, including that transported by the ESPO (Eastern Siberia-Pacific Ocean pipeline) and overseas shipments from Russian European and Far Eastern ports, amounted to nearly 8.42 million tons in May, according to Chinese customs data.

That is approximately 1.98 million barrels per day and more than the April daily average of 1.59 million barrels. Chinese companies, including the state-owned Sinopec refinery and the state-owned Zhenhua Oil, have increased purchases of Russian oil attracted by big discounts after the West imposed sanctions on Russia.

Saudi Arabia became the second largest supplier with volumes growing nine percent year-on-year in May, to 7.82 million tonnes or 1.84 million barrels per day, down from 2.17 million in April. Russia thus took first place after 19 months.

Customs figures released on Monday also show that China imported 260,000 tonnes of Iranian crude oil last month. Customs reported zero imports from Venezuela. State oil firms have shunned purchases since late 2019 for fear of falling foul of secondary US sanctions.

Imports from Malaysia, often used as a transfer point in the last two years for oil originating from Iran and Venezuela, amounted to 2.2 million tonnes, steady versus April but more than double the year-earlier level.

Russia could take over the Asian market

“Russia has diverted a large share of exports to India and China,” noted energy analyst Sergei Vakulenko for the Carnegie Endowment for International Peace.

He also said that Western sanctions meant that Russia would likely take over the Asian market in years to come. Last year, Russia sold around 33 billion cubic meters of gas to Asia, which is less than 20% of the size of the European market. Nevertheless, experts warn that Russia will slowly attempt to shift its infrastructure to increase sales in the region.