Russia to Boost Exports of China’s Favorite Russian Crude in July

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Russia is set to raise the shipments of the ESPO Blend crude from its Far East port of Kozmino in July, after lower exports this month due to maintenance, trading sources told Reuters on Wednesday.
ESPO loadings from Kozmino are expected at 4 million tons, or about 970,000 barrels per day (bpd) in July, up from 3.6 million tons in June.
According to Reuters calculations, daily exports of ESPO from Russia’s Far East, predominantly to Chin,a are set to rise by 7.5% in July compared to June, which is a day shorter.
Going forward, ESPO crude exports are expected to stay around the 4 million ton mark in the coming months.
Chinese refiners are buying a lot of ESPO crude from Russia as China and India have become the top buyers of Russian oil since 2022.
China’s demand for ESPO appeared to wane in April and May amid softening import demand in the world’s top crude oil importer and uncertainty about the implications of the additional U.S. sanctions on Russia imposed in January.
As a result, India bought more Russian ESPO Blend oil in April than any month since August 2024, stepping in to scoop up what weakening Chinese demand for the blend has left behind.
Chinese demand for Russian ESPO dipped due to sanctions on Russian companies that led Chinese state-owned refiners to cut back, in combination with seasonal refinery maintenance.
Typically, India does not buy large volumes of ESPO because it is costlier than Russian Urals blend, and is more challenging to ship.
Yet, in April, China’s Sinopec, the biggest refiner in Asia by processing capacity, bought its first ESPO blend from Russia for May loading since the February loading plans, after refraining from buying the grade for loading in March and April until it assesses the risk from the U.S. sanctions.
Earlier this year, state oil firms in China either halted or reduced Russian oil volumes, but the independent refiners in China, which prefer to buy cheaper Russian and Iranian oil, picked up the slack.