Russia holds spot as China’s top oil supplier for 7 month in a row

BEIJING / Reuters

Russia held on to its position as China’s top crude oil supplier ahead of Angola and Saudi Arabia for the seventh straight month in September, with shipments hitting a record as refiners rushed to buy lower-sulphur oil to meet cleaner fuels standards.
Imports from Russia last month were almost 6.35 million tonnes, or 1.545 million barrels per day, up 60.5 percent from the same month last year, according to a detailed breakdown of commodity trade data released by the General Administration of Customs.
For the first three quarters, crude volumes from Russia gained 18 percent year-on-year to nearly 45 million tonnes, or 1.2 million bpd, also holding firm its top ranking. The lower cost of Russian crude and China’s shift to cleaner diesel was the key driver behind the record Russian oil purchases. “Many teapot refineries are not equipped with hydrotreating units to cut down sulphur. That means they need to import crude with lower sulfur content to meet the cleaner diesel quality,” said Harry Liu of consultancy IHS Markit.
The widening spread between Brent-linked crudes and Middle Eastern benchmark Dubai also made Russia’s ESPO grade, priced off Dubai, relatively attractive, Liu added. Meanwhile Angola, China’s second largest source of crude, supplied 11.7 percent more oil than a year earlier at 4.677 million tonnes, or 1.14 million bpd. Angola also maintained the second spot for the January-September supplies ahead of Saudi.
Supplies from Saudi Arabia were up 9.6 percent last month year-on-year at 4.276 million tonnes, or about 1.04 million barrels per day (bpd). Shipments for the January-September period dipped 0.6 percent on year at 38.52 million tonnes, or 1.03 million bpd. Russian supplies could climb further next year as privately run conglomerate CEFC China Energy agreed earlier this month to buy 220,000 to 260,000 bpd of oil from Rosneft, as part of a $9.1 billion investment in the world’s largest listed oil company.
Shipments from Iran were up 59 percent last month from a year earlier to 3.22 million tonnes.