China is likely to have saved $10 billion on crude oil imports so far this year as it has imported record volumes of cheaper oil from Russia, Iran, and Venezuela—all three under U.S. and Western sanctions, a Reuters analysis showed on Wednesday.
As international benchmark prices rose from July due to tightening supply, China has managed to save billions of U.S. dollars from its crude oil import bill, taking advantage of cheaper crude cargoes from the three oil exporters under sanctions.
China imported a record-high volume of 2.765 million barrels per day (bpd) of crude from Russia, Iran, and Venezuela between January and September, per the Reuters analysis of data by vessel flow trackers Kpler and Vortexa.
If China had bought those volumes from non-sanctioned oil exporters, it would have paid $10 billion more on its crude imports, according to Reuters’ calculations.
Those imports are estimated to have accounted for 25% of overall Chinese crude oil purchases in the first nine months of 2023.
Russia, Iran, and Venezuela made up around 21% of China’s crude oil imports in the same period of 2022, and just 12% in the same months of 2020, according to the Reuters analysis.
Despite higher oil prices in recent months and narrower discounts of Russian crudes to international benchmarks, Russia remains the single largest crude oil supplier to China.
During the first half of 2023, Chinese imports of Russian crude oil averaged 2.13 million bpd, which helped Russia oust its OPEC+ partner Saudi Arabia from the top spot as the single biggest supplier to the world’s top crude importer so far this year, per Financial Times estimates based on Chinese customs data.
China has also boosted imports of crude from Iran, amid increased competition with India for cheap Russian oil and a more lenient U.S. sanction enforcement on Iranian oil trade so far this year.
By Tsvetana Paraskova for Oilprice.com
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