• 16 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 18 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 20 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 21 hours Schlumberger Warns Of Moderating Investment In North America
  • 22 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 23 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 1 day Mexico Says OPEC Has Not Approached It For Deal Extension
  • 1 day New Video Game Targets Oil Infrastructure
  • 1 day Shell Restarts Bonny Light Exports
  • 1 day Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 1 day Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Clashes In Kurdistan Send Oil Prices Higher

Clashes In Kurdistan Send Oil Prices Higher

Reports of skirmishes between Iraqi…

The U.S. LNG Boom Could Be About To Stall

The U.S. LNG Boom Could Be About To Stall

United States LNG has seen…

China Boosts Russian Oil Imports As Brent/Dubai Spread Shrinks

China Flag

Oilfield Services Rush To Raise Capital As Oil Recovery HoldsChina’s independent refiners, the so-called teapots, are importing Russia’s Urals grade with the drop in the Brent/Middle East spreads as OPEC’s cuts have made the Dubai and Oman crudes more expensive.

The increased Chinese imports from Russia could further boost Russia’s position as China’s largest crude oil supplier, after it recently overtook Saudi Arabia to top the ranking.

Russia last year overtook Saudi Arabia as China’s biggest supplier of crude oil thanks in large part to increased demand the teapots. The average daily amount that Russian companies exported to China in 2016 stood at 1.05 million barrels, up by 25 percent from 2015. Saudi Arabia’s average daily shipments to the world’s second-largest oil consumer were 1.02 million barrels daily in the period, an amount representing a slight 0.9-percent uptick on 2015.

Now in early 2017 the drop in the Brent/Middle East crude spreads has opened the arbitrage window for Russia’s Urals – which is priced against the Brent - to head to Asia.

According to Reuters sources with knowledge of trade schedules, Shandong Wonfull Petrochemical Group has bought 2 million barrels of the Urals crude grade for delivery this month and in May.

The Urals quality is good; it is also very similar to Oman, and has better refining economics, one source told Reuters. Since Oman crude has become more expensive with the OPEC cuts, teapots are replacing Oman with Urals, according to traders.

Related: Europe’s Big Oil Breaks Even At $50-60 Per Barrel

Unlike China’s state oil companies that are bound by long-term contracts with Saudi Arabia, the small refineries are taking advantage of Russia’s exports and the narrow spread between the Brent and the Middle Eastern benchmarks Oman and Dubai.

According to trade sources quoted by Reuters, Lukoil’s trading unit Litasco would be sending 1 million barrels of Urals crude, part of which it would sell to an independent refiner in China. In addition, Reuters shipping data show that Litasco and Unipec -- the trading unit of Sinopec – are expected to send two Suezmax tankers to China, loading from Novorossiisk in the middle of February.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News