Russia has overtaken Saudi Arabia as China’s biggest source of oil imports in 2023, despite the Western sanctions capping oil prices and reducing Russian imports, reports say.
According to Chinese customs data released on Monday, China – the largest oil importer in the world – purchased a record 107.2 million tonnes of crude oil from Russia last year, around 25% more than in 2022.
Plummeting by 1.8%, China imported about 86 million tonnes of oil from Saudi Arabia, meaning that Russia was China’s top supplier for the first time since 2018.
The price of Russian ESPO crude increased through 2023 due to rising demand from Chinese and Indian refiners, who took advantage of the discounted oil. As a result, the price surpassed the $60 per barrel (/bbl) price cap imposed by the Group of Seven in December 2022.
India is the greatest importer of Russia’s Ural Mountain seaborne oil, accounting for 50% of all Russian exports, with China coming in second.
In May 2023, China and India both imported record-high levels of Russian crude oil facilitated by discounted supply prices, reducing the demand for oil from other areas such as the Middle East and Africa.
Since neither of the countries signed up for sanctions, the discounted prices on Russian oil above the $60/bbl cap were still lower than OPEC’s oil prices.
Russian pipeline gas and liquefied natural gas imports in China rose by 2.6 and 2.4 times in 2022, respectively. China’s imports also jumped by 20% to 68.06 million tonnes.
According to Reuters, oil prices rose on Monday as traders assessed the consequences of geopolitical tensions in the Middle East and Ukraine on oil supply and the economic pressures on global demand.
This morning, the price of Brent crude oil increased by $0.22 to $78.78 per barrel. Additionally, the front-month US West Texas Intermediate crude futures contract for February delivery was up by $0.31 at $73.72 per barrel in slow trade.
"This morning's subdued reopen speaks volumes about current sentiment in the crude oil market despite ongoing geopolitical tensions in Europe and the Middle East," IG analyst Tony Sycamore told Reuters.
