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Russia leapfrogged Saudi Arabia to become China’s top crude oil supplier in 2023, data showed on Saturday, as the world’s biggest crude importer defied Western sanctions to purchase vast quantities of discounted oil for its processing plants.
Russia shipped a record 107.02 million metric tons of crude oil to China last year, equivalent to 2.14 million barrels per day (bpd), the Chinese customs data showed, far more than other major oil exporters such as Saudi Arabia and Iraq.
Imports from Saudi Arabia, previously China’s largest supplier, fell 1.8% to 85.96 million tons, as the Middle East oil giant lost market share to cheaper Russian crude.
Shunned by many international buyers following Western sanctions over the Kremlin’s 2022 invasion of Ukraine, Russian crude oil traded at significant discounts to international benchmarks for much of last year amid a Western-imposed price cap.
Accelerating demand from Chinese and Indian refiners for the discounted oil boosted the price of Russian ESPO crude through 2023, pushing past the Group of Seven’s $60 a barrel price cap imposed in December 2022 as alternative shipping and insurance options to circumvent the sanctions proliferated.
ESPO crude shipments for December delivery were priced at a discount of around 50 cents to 20 cents per barrel to the ICE Brent benchmark, versus a $1 premium for October delivery cargoes and a discount of $8.50 for shipments delivered in March, according to trading sources.
At the same time, Saudi Arabia raised prices for its signature Arab Light in July, pushing some refiners to look for cheaper cargoes.
