Daily Management Review

China's May Oil Imports From Russia Set A New High, Surpassing Top Supplier Saudi Arabia


China's crude oil imports from Russia increased by 55 per cent year on year in May, surpassing Saudi Arabia as the leading supplier, as refiners took advantage of discounted supplies amid sanctions imposed on Moscow for its invasion of Ukraine.
According to Chinese General Administration of Customs figures, imports of Russian oil totaled roughly 8.42 million tonnes, comprising supplies pumped via the East Siberia Pacific Ocean pipeline and seaborne shipments from Russia's European and Far Eastern ports.
This equates to around 1.98 million barrels per day (bpd), a quarter increase from 1.59 million bpd in April.
The data, which shows that Russia reclaimed the top spot among suppliers to the world's largest crude oil importer after a 19-month hiatus, reveals that Moscow is able to find consumers for its oil despite Western sanctions, despite having to lower prices.
While COVID-19 curbs and a slowing economy have dampened China's overall crude oil demand, leading importers such as Sinopec and trader Zhenhua Oil have increased their purchases of cheaper Russian oil on top of sanctioned supplies from Iran and Venezuela, allowing them to reduce competing supplies from West Africa and Brazil.
Saudi Arabia was the second-largest supplier, with May volumes increasing by 9 per cent year on year to 7.82 million tonnes, or 1.84 million bpd. This was down from 2.17 million bpd in April.
China purchased 260,000 tonnes of Iranian crude oil last month, the third shipment since December, according to customs data released on Monday, confirming an earlier Reuters story.
Despite US sanctions, China has continued to import Iranian oil, which is frequently disguised as shipments from other countries. The import amounts are about similar to 7 per cent of total Chinese crude oil imports.
Overall crude oil imports in China increased over 12 per cent in May from a low base a year earlier to 10.8 million bpd, compared to the 2021 average of 10.3 million bpd.
Customs recorded no Venezuelan imports. State-owned oil companies have avoided purchasing since late 2019, fearing further US sanctions.
Imports from Malaysia, which has frequently served as a transfer point for oil originating in Iran and Venezuela in the last two years, totalled 2.2 million tonnes, unchanged from April but more than double the year-ago figure.
Brazil's imports plummeted 19% year on year to 2.2 million tonnes, as the Latin American producer faced cheaper competition from Iranian and Russian barrels.
Separately, figures show that China imported approximately 400,000 tonnes of Russian liquefied natural gas (LNG) this month, up 56 per cent from May of 2021.
According to customs data, imports of Russian LNG - primarily from the Sakhalin-2 project in the Far East and Yamal LNG in the Russian Arctic - increased 22 per cent year on year to 1.84 million tonnes in the first five months.