China’s imports of Russian oil rose to a record high of 2.29 million b/d in May

Chinese government data showed on Tuesday that oil imports from Russia rose to an unprecedented level in May, as private refineries continued to flock to Russia’s Espoo and Urals crudes at discounted prices amid sanctions imposed on them.

According to data from the General Administration of Customs, total oil imports from Russia reached 9.71 million metric tons in May, or 2.29 million barrels per day. Shipments increased 15.3 percent from 1.50 million barrels per day in the same month last year.

This represents the highest level ever, and an increase of 32.4 percent from the total in April, which was 1.73 million barrels per day.

Total crude imports from Saudi Arabia amounted to 7.32 million tons in May, equivalent to 1.72 million barrels per day, down 16 percent from 2.05 million barrels per day last month. Saudi Arabia was the largest crude exporter to China in April.

In early April, Saudi Arabia and other members of the OPEC+ alliance announced surprise production cuts of 1.16 million bpd, starting in May. The kingdom cut 430,000 barrels per day of production in May, according to a Reuters survey published at the end of the same month.

Much of the uptick in demand for Russian crude came from private refiners in China, including large firms such as Hengli Petrochemical. The company’s 400,000-bpd refinery in the northeastern city of Dalian received its first shipment of Urals crude in early May at 730,000 barrels, in addition to a total of 3.71 million barrels of ESPO over the month, according to the data. Ship tracking.

Smaller private refineries in the coastal province of Shandong also reported an improvement in their profit margins due to the purchase of sanctioned cargoes from Russia, Iran and Venezuela.

Chinese refiners use merchant middlemen in shipping and insurance operations for Russian crude to avoid violating Western sanctions.

Customs data also showed that imports from Malaysia reached 1.34 million bpd in May, up 158.6 percent from the same period last year. Malaysia is often used as a middle point for sanctioned goods from Iran and Venezuela.

Imports from the United States more than tripled year-on-year to 2.22 million tons despite heightened geopolitical tension between the two countries, due to a short-term price advantage over that from members of the Organization of the Petroleum Exporting Countries (OPEC) after the OPEC+ cut. for production.