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The Chinese Ministry of Commerce has recently met with representatives of around ten independent refiners to inquire about how much Russian crude oil the private refiners are importing and at what prices, sources familiar with the matter told Reuters on Friday.
China is buying increased volumes of Russian crude as Moscow pivots its sales to Asian markets after the Western embargoes and price cap on its crude oil and refined petroleum products.
The independent refiners, often referred to as the teapots, are importing a large portion of the Russian volumes, taking advantage of the deep discounts at which Russia sells its oil to customers.
In the talks with the private refiners, “The government wants to understand how much independent refiners could possibly buy and their actual appetite for such imports,” a source with direct knowledge of the talks told Reuters.
Russia’s exports to China soared to an estimated 2.03 million barrels per day (bpd) in January, up from 1.52 million bpd in December, per Refinitiv Oil Research data.
The state giants of China, including PetroChina and CNOOC, have recently bought more Russian crude oil and could further ramp up imports from Russia to meet demand with cheaper oil, according to an Energy Aspects note last week carried by Bloomberg. If China moves to fill its reserves, the intake of Russian oil could jump to 2.5 million bpd this year, Bloomberg notes.
After a brief hiatus around the time the EU embargo and the G7 price cap on Russian crude came into force, China’s largest state-held refiners have resumed purchases of Russia’s flagship Urals crude at well below the $60 cap without breaching the sanctions, industry sources told Reuters earlier this week.
State oil refining giants PetroChina and Sinopec are back on the market for Urals and are buying it at deep discounts via trading companies that handle the payments to Russian oil exporters and arrange the shipping and insurance services, according to Reuters’ sources.
