Russia became the leader in crude oil supplies to China in May with 8.42 million tons, displacing Saudi Arabia, which had held the position for the previous 18 months.
The main reason is the huge discounts offered by Moscow to Chinese buyers, Reuters sources claim. In May, China increased imports of Russian crude oil by a record 55% on an annual basis, according to data from the General Customs Administration of China, quoted by the agency. Last month, almost 2 million barrels a day were imported every day, or a quarter more than in April. Imports are also made by tankers via the Eastern Siberia-Pacific Ocean pipeline.
Due to the sanctions, Russia started offering buyers in March an average discount of about 20% on the price of the Urals variety, in April it reached 33%, followed by a correction in the opposite direction by almost 20%.
In early April, Reuters reported, citing its sources, that Chinese state-owned oil companies (PetroChina, Sinopec, Sinochem, and CNOOC) were refraining from concluding new contracts to supply Russian oil. Beijing is wary of a situation in which buying extra fuel begins to look like support for Moscow in its attack on Ukraine.
“The message and tone are clear – risk control and compliance with [Western sanctions] are more important than profit,” a source familiar with what they are discussing at Unipec (a division of Sinopec) told the agency. He also noted that there are many difficulties with payments and logistics, despite the existence of “huge discounts”. According to the Financial Times at the time, private oil refineries had increased the amount of oil purchased from Russia by early May.
Sinopec and state-owned Zhenhua Oil bought at a discount in May as Saudi oil supplies rose 8.7 percent year on year. This equates to 7.82 million tonnes for the whole month or 1.84 million barrels per day. In April, the daily norm was 2.17 million barrels.
During the same period, supplies from Brazil decreased by 19% on an annual basis to 2.2 million tons and the explanation is Russian dumping. China has not bought Venezuelan oil since 2019 for fear of falling under US secondary sanctions, according to Reuters.
In early June, European countries approved a package of sanctions banning the purchase of oil from Russia, as well as banning “insurance and reinsurance of maritime transport of such goods [oil and petroleum products] to third countries.”
This creates severe restrictions on shipping, the capacity of oil pipelines from Russia to Asia cannot cover all the volumes that Europe, the United States, and Canada are giving up, and the construction of new pipelines takes years. At least initially, because of rising prices from the war and other factors, Moscow will continue to profit – and probably even more so now – from real exports of smaller volumes of Russian oil.
Related Posts
- Germany will stop importing oil and gas from Russia
By the end of the year, Germany will completely suspend oil imports from Russia, Foreign…
- Oil has risen in anticipation of new sanctions against Russia
Oil prices rose in early trading on Tuesday as investors awaited the new US and…
- China with a new warning not to avoid sanctions
In a joint statement, European External Action Service Secretary-General Stefano Sannino and United States Deputy…
- The re-establishment of the West. How Russia, China, and COVID-19 unite us
For years, technology giant Apple has been routinely blamed for its overconfidence in China's economy…
- Russia has taken over Mariupol
Russia has taken over Mariupol, Defense Minister Sergei Shoigu told Vladimir Putin, Reuters reported, citing…
- Hungary wants 750m euros to stop importing Russian oil
Hungary wants 750m euros to stop importing Russian oil. This became clear from the words…
- Russia's sharpest response to Western sanctions
"The suspension of gas supplies to Bulgaria and Poland was Russia's" sharpest response "to Western…
- Oil prices rise amid fears about Russian supplies
Oil prices rose in early trading on Monday, although they started the day with a…
- Why Germany cannot part with Russia
Germany's dependence on Russian energy supplies and its inability to quickly abandon natural gas and…
- The EU-China meeting: An open conversation about rivalry
Dr. Yanka Ortel, Director of the Asia Program of the European Council on Foreign Relations…
- Russia cannot take control of Ukraine's skies
Russia's armed forces cannot establish control over Ukraine's skies. It is in control of most…
- Russia has killed more than 20,000 civilians in Mariupol
The mayor of Mariupol said that according to the latest data, about 21,000 civilians have…
- 21,600 newly infected with COVID-19 in China
China has registered 21,600 new cases of coronavirus infection in the last 24 hours, Reuters…
- Russia is preparing a naval landing to capture Mariupol
The Russian army is preparing a naval landing in Mariupol. The information is from the…
- The opposite effect of sanctions against Russia
Joe Biden and his entourage have decided to weaken the Russian economy by imposing sanctions…
- Russian crude oil will continue to trade despite the bans
Sunday was the day European Union regulations banning deals with Russian state-owned energy companies come…
- CIA Director: Russia can use nuclear weapons
CIA Director William Burns has warned of the danger of Russia using tactical or small…
- Sanctions against Russia reveal Putin's secret privacy
Western sanctions aimed not only at the Russian president's inner circle but also at his…
- Austria is ready to mediate between Russia and Ukraine
Austrian President Alexander van der Belen said his country was ready to mediate talks between…
- Russia is learning from its mistakes in Ukraine
In the first two months of the war in Ukraine, the United States learned a…
- The EU has called on China to help end the war in Ukraine
The European Union has called on China to assume its responsibility as a permanent member…
- France is trying to persuade Europe of an embargo on Russian oil
French Finance Minister Bruno Le Mer has said he hopes to persuade European partners to…
- Finland did not bow to Russia
More than 80 years ago, little Finland opposed Russia. Today, the country has not bowed…
- Russia has given up rubles and paid its debt in dollars
Russia appears to have given up its last-minute intention to pay only in rubles while…
- Due to the lack of oil: they change biscuits, chips, and cans
Faced with a shortage of sunflower oil, producers want to change the composition of their…
- Dallas Federal Reserve: A global recession is inevitable without Russian oil
The world economy will probably not be able to avoid a recession without a resumption…
- Does Russia have a laser weapon and what can it do?
Laser weapons are fast, accurate, discreet, and cost-effective. Moscow says it is already using laser…
- Turkish ships sailing to Ukraine and Russia are insured
The Turkish Ministry of Transport will provide insurance guarantees to Turkish ships en route to…
- Russia is preparing retaliatory measures against the EC because of the black list of airlines
The decision of the European Commission (EC) to blacklist 20 Russian airlines will lead to…
- Gallup: Russia has been unpopular around the world before
President Vladimir Putin invaded Ukraine at a time when Russia had been able to slowly…
More Stories
Europe has spent half a billion euros on energy compensation
Governments in Europe have allocated nearly €500 billion over the past year to protect citizens and companies from rising gas...
The crisis also turned second-hand cars into a hard-to-afford luxury
The coronavirus epidemic and the war in Ukraine have made changing a car a difficult task with many unknowns and...
Smart technologies reduce electricity bills
As summer temperatures rise across the US, many consumers are seeing an increase in their electricity bills as well. The...
Bill Gates: The next chapter in the history of the planet is still being written
World-famous entrepreneur Bill Gates talks about Kim Stanley Robinson's book "Ministry of the Future", which both scares and gives hope....
Fall in commodity prices, has inflation peaked?
The fall in the prices of many raw materials - corn, flour, honey, and others - raises hopes that a...
Inflation in June in Switzerland rose to 3.4%
Inflation in Switzerland in June in Switzerland rose to 3.4% in June, the first time Swiss inflation exceeded 3% since...