Russia was the single largest crude oil supplier to China in January and February, overtaking Saudi Arabia which was the number-one supplier of oil to China last year, according to Chinese customs data cited by Reuters.
As China accelerated the buying of cheap Russian crude oil at discounts to international benchmarks, Chinese imports of crude from Russia jumped by 23.8% year over year to 1.94 million barrels per day (bpd) in January and February 2023, per the data reported by China’s General Administration of Customs.
China reports trade and economic data for January and February together to remove distortions around the fluctuating week-long Lunar New Year holiday.
In the first two months of this year, Russia beat Saudi Arabia to the top spot of Chinese crude oil suppliers as imports of Saudi crude fell by 4.7% to the equivalent of 1.72 million bpd, compared to 1.81 million bpd for the same period of 2022.
For the full-year 2022, Saudi Arabia was China’s top crude oil supplier – ahead of Russia – with shipments averaging 1.75 million bpd.
In recent months, China has been buying increased volumes of Russian crude as Moscow pivoted its sales to Asian markets following the Western embargoes and price caps on its crude oil and refined petroleum products.
The independent refiners in China, often referred to as the teapots, are importing a large portion of the Russian volumes, taking advantage of the deep discounts at which Russia sells its oil to customers.
Despite a sluggish start to 2023, China’s energy commodity imports are expected to rise later this year, while oil demand is set to rebound and lead global oil consumption to a record high, forecasters say.
China’s reopening is set to add momentum to global economic growth, OPEC said in its Monthly Oil Market Report (MOMR) this week, as it revised up its forecast for Chinese oil demand growth.
The International Energy Agency (IEA) said in its report last week that “Building stocks today will ease tensions as the market swings into deficit during the second half of the year when China is expected to drive world oil demand to record levels.”
By Tsvetana Paraskova for Oilprice.com
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