Russia continued to be China’s biggest crude oil supplier in July for a 5th consecutive month, while Chinese refineries have been taking in more Brent-price-linked West African crude at the expense of sour Middle Eastern varieties as OPEC’s cuts led to narrower price differentials making African oil more attractive for buyers, according to data by China’s General Administration of Customs On August 23, 2017.
China’s crude oil imports from Russia averaged around 1.17 million bpd in July, a 54% surge compared to the same month last year.
Total Chinese imports last month stood at 8.18 million bpd, down compared to June, but up 12% year-on-year.
Year-to-date, China’s crude imports rose 13.6 % to 8.51 million bpd.
Down in the suppliers’ list behind Russia came Saudi Arabia and Angola - China’s №2 and №3 crude oil providers in July, respectively.
Chinese imports from Saudi Arabia inched down 0.8 % annually to around 940,000 bpd, while imports from Angola dropped 17.1 % to 921,520 bpd.
Independent refiners in China - the so called teapots - not bound by long-term supply contracts with Saudi Arabia - have been replacing the Middle Eastern grades with Urals, a Russian grade with qualities similar to the Oman crude grade and with even better refining economics, according to traders.
Urals, which is priced against the Brent, is now a business-feasible opportunity for smaller Chinese refiners, after the rise in Middle Eastern benchmarks.
Chinese refinery demand helped Russia to outstrip Saudi Arabia to take the top spot in crude exports to China last year.
Russia’s exports jumped 25% annually to 1.05 million bpd in 2016, compared to Saudi Arabia’s shipments of 1.02 million bpd, inching up just 0.9%.
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