Image Source: Fox Business
Russian oil exports volume before now has increased by 55% every year until May when the volume skyrocketed, thanks to China’s crude oil imports from Russia. Thus surpassing Saudi Arabia as the main supplier as refiners took advantage of discounted supplies due to sanctions imposed on Russia for its invasion of Ukraine.
According to figures from the Chinese General Administration of Customs, Russian oil imports totaled roughly 8.42 million tonnes, including supplies pushed through the East Siberia Pacific Ocean pipeline and seaborne exports from Russian ports in Europe and the Far East. That’s 1.98 million barrels per day (bpd), up from 1.59 million bpd in April.
The data, which shows that Russia has reclaimed the top spot among exporters to the world’s largest crude oil exporter after a 19-month hiatus, suggests that Moscow is able to find consumers for its oil despite Western sanctions, though it has had to lower prices.
While Covid-19 restrictions and a slowing economy have hampered China’s overall crude oil demand, major importers such as Sinopec and trader Zhenhua Oil have increased their purchases of cheaper Russian oil on top of sanctioned supplies from Iran and Venezuela, allowing them to reduce competing supplies from West Africa and Brazil.
Saudi Arabia was the second-largest provider, with volumes of 7.82 million tonnes, or 1.84 million barrels per day, up 9% in May. The April figure of 2.17 million bpd was lower.
According to customs data released on Monday, China also purchased 260,000 tonnes of Iranian crude oil last month, which confirms a Reuters report from last December.
Despite US sanctions against Iran, China has continued to import Iranian oil under the guise of supply from other nations. As a result, China’s crude oil imports account for around 7% of the country’s total.
China’s overall crude oil imports increased over 12% in May from a low base a year ago, to 10.8 million barrels per day (bpd), compared to a 2021 average of 10.3 million bpd. Venezuelan imports totaled nil, according to customs. Since late 2019, state-owned oil companies have avoided making purchases for fear of being sanctioned again by the US.
Apart from its dependence on Russian oil, imports from Malaysia, which has frequently served as a transfer point for oil from Iran and Venezuela in the last two years, were 2.2 million tonnes, which was unchanged from April but more than double the year-ago figure. Brazil’s imports decreased 19 percent yearly to 2.2 million tonnes, as the Latin American exporter faced cheaper competition from Iran and Russia.
Separately, data revealed that China imported approximately 400,000 tonnes of Russian liquefied natural gas (LNG) in May, up 56% from May 2021.
According to customs data, Russian LNG imports increased 22% yearly to 1.84 million tonnes in the first five months, mostly from the Sakhalin-2 project in the Far East and Yamal LNG in the Russian Arctic.