Chinese Refiners Snap Up Discounted ESPO And Urals Crudes

• Russia's crude oil sales to China surged to its historic high in March.

• Chinese refiners purchased discounted ESPO and Urals crudes from Russia.

• Saudi Arabia still trails Russia in crude oil supply to China despite a 30% increase in March compared to the previous year.

China imported the highest-ever volumes of Russian crude oil in March, which kept Russia on top of Chinese crude suppliers’ list ahead of Saudi Arabia, government data from China showed on Friday.

Russian crude arrivals to China surged to a record high of 2.26 million barrels per day (bpd) in March, up by 50% compared to 1.50 million bpd in March 2022, per data from China’s General Administration of Customs cited by Reuters.

Crude arrivals to China from Saudi Arabia also increased last month, but were still below the record volumes of mostly discounted Russian crude, which Chinese refiners bought. China’s imports of crude oil from Saudi Arabia averaged 2.10 million bpd in March, up by 30% from 1.61 million bpd in March last year.  

Russia beat Saudi Arabia to the top spot as the biggest supplier to China in the first quarter of 2023, too, as many Chinese refiners snapped up discounted ESPO and Urals crudes. 

In recent months, China has been buying increased volumes of Russian crude as Moscow pivoted its sales to Asian markets following the Western embargoes and price caps on its crude oil and refined petroleum products.

Russia was the single largest crude oil supplier to China in January and February too,overtaking Saudi Arabia, which was the number-one supplier of oil to China last year, according to Chinese customs data from last month. 

As China accelerated the buying of cheap Russian crude oil at discounts to international benchmarks, Chinese imports of crude from Russia jumped by 23.8% year over year to 1.94 million bpd in January and February 2023, per data reported by China’s General Administration of Customs in March.  

China reports trade and economic data for January and February together to remove distortions around the fluctuating week-long Lunar New Year holiday.

For the full-year 2022, Saudi Arabia was China’s top crude oil supplier – ahead of Russia – with shipments averaging 1.75 million bpd.