India and China’s purchases of Russian crude oil in May are seen to have breached all-time highs.
As buyers including these two big economies gorged on discounted supplies from Russia, it led to a fall in demand for oil from the Middle East and Africa, news agency Reuters reported citing shiptracking data.
China, world’s No. 1 crude importer, India (world No. 3) are top buyers of Russian oil. In May, these two imported about 110 million barrels in May from Russia. This was a nearly 10% jump month on month and came despite American warnings against price cap evasion.
Arrivals of Russian shipments in India are assessed to have reached a record high of 8.6 million tonnes (62.8 million barrels) while China is expected to have received 6 million tonnes, steady from April, Reuters said based on Vortexa data.
Data from Kpler, another big tracker, showed a similar trend. As per Kpler, India’s imports touched a record of 66.7 million barrels and China’s was at 49.2 million barrels.
According to the data, Indian refiners increased purchases of medium sour crude Urals and lighter grades such as Sokol and Varandey, in addition to a steady inflow of ESPO crude exported from the Pacific port of Kozmino.
China, where refiners are pushing to cut feedstock costs and improve refining margins amid a slower-than-expected economic recovery, has bought more and more Russian oil in recent months.
“Chinese buyers’ increased demand for Russian oil loading in April and beyond was supported by higher profitability of supplies amid softer freight and firmer differentials,” Reuters said quoting a trader.
The lumpsum freight rates for tankers carrying crude from Russia’s Far East port Kozmino, a major ESPO export hub, to northern China fell to $2.2 million after hitting an all-time high of $2.4 million in mid-March, Simpson Spence Young data on Refinitiv Eikon showed.
The rise in Russian supplies comes ahead of a meeting between OPEC and their allies including Russia on June 4.
Producers face some pressure to act to support Brent futures which have fallen 5% this week to about $73 a barrel despite an OPEC+ pledge in April to cut more output from May.Share This