China Has Sharply Increased Its Oil Purchases From Saudi Arabia To Replace Russian Oil

Russia has lost the top spot to the Saudis in the PRC's top oil suppliers.

China significantly reduced its purchases of Russian oil in November, replacing it with crude from Saudi Arabia, Reuters reported, citing tanker transportation statistics from Kpler.

This month, according to Kpler's calculations, China will import 926,000 barrels per day from Russia - 36% less than in October, when supplies reached 1.45 million barrels per day.

Almost by that amount - about 500,000 barrels per day - Chinese refineries have increased imports from Saudi Arabia: it will amount to 1.78 million barrels per day against 1.2 million a month earlier. As a result, Russia will cede to the Saudis the first place in the top of China's largest oil suppliers.

India, on the contrary, received more Russian oil in November than in October - 2.26 million barrels per day against 1.7 million.

But already in December, the flow of Russian oil to the Indian market may collapse: five of the country's largest refineries, Reliance Industries, Bharat Petroleum, Hindustan Petroleum, Mangalore Refinery and Petrochemicals, and HPCL-Mittal Energy, have refused to take deliveries for the next month.

According to Bloomberg, Russian oil is now purchased only by state-owned Indian Oil and Rosneft-owned Nayara Energy. Moreover, the former has purchased crude from companies not hit by sanctions, while the latter continues to operate only on barrels of Russian origin.

Russian oil Indian refineries plan to replace supplies from Saudi Arabia and Iraq, which have lowered their grades for Asian customers, sources in India's oil refining industry told Reuters. One of them said Middle Eastern suppliers have a lot of oil and have fulfilled all requests for additional shipments.

Because of falling demand, discounts on Russian crude at Baltic and Black Sea ports have doubled in a matter of weeks. They now reach $19.4 per barrel, although in early November they were $13-14 per barrel, and before sanctions were imposed on Rosneft and Lukoil they were around $11.

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