China's state-owned energy company Sinopec
China's state-owned energy company Sinopec, the world's largest oil refiner, sharply increased its purchases of Russian oil from the Far East.
Consensus
- Sinopec, the world's largest oil refiner, increased its purchases of Russian ESPO Blend crude oil.
- The increase in purchases occurred from July to September and amounted to 241,000 to 320,000 barrels per day.
- This was done to compensate for reduced crude oil supplies from the Middle East.
- The volume of purchases represents 5–6% of Sinopec’s total refining capacity of 5.2 million barrels per day.
- Russian ESPO Blend was offered at a discount of $1–2 per barrel compared to Brent, making it about $10 cheaper than competing Middle Eastern and Brazilian crude oils.
- China experienced a 41% year-on-year decline in crude oil imports in June, attributed to the Iran conflict.
- China eased export restrictions on oil products starting in July.
- The shift in procurement reflects a move toward more reliable and lower-cost supplies, particularly from Russia’s Far East via land and short-haul routes.
Points of divergence
- Sinopec increased purchases to support the export of surplus fuel with high profitability, despite restrictions on fuel exports since March. — vesti
- In late July, Russia's Security Council deputy secretary Alexander Maslenkov announced that Russia is negotiating with several countries, including China, on rare earth mineral projects in Siberia, specifically the Angara-Yenisei cluster. — vesti
Coverage (3 sources)
- China's largest state company increased Russian oil purchases to a record — The Moscow Times
- Sinopec sharply increased purchases of Russian oil — Коммерсантъ
- World's largest oil refiner increased purchases from Russia — Вести