China Imports More Russian Oil Despite Risks

China’s imports of Russian seaborne crude are on the rise this month, but their trajectory going forward remains a mystery as the West seeks to tighten sanctions on Moscow. Seaborne imports of Russian crude are slated to increase by more than 150,000 barrels per day in August from July, with Chinese independent refiners hiking their Urals purchases substantially lately. Roughly 1.3 million b/d of Russian seaborne crude are expected to land at Chinese ports this month after including estimated volumes from ship-to-ship transfers, said Emma Li, a China-focused analyst at Vortexa, up from 1.1 million b/d in July. Kpler projects 1.31 million b/d of Russian seaborne crude arriving in China this month, up from 1.16 million b/d in July. Chinese independent refiners' increasing appetite for Urals is notable. For the first 18 days of August, Vortexa estimates around 500,000 b/d of Urals arrived at Chinese ports for independents, while national oil companies (NOCS) took none. Independents took little to no Urals in 2021 and in the first five months of 2022. In June, they were noticeable in the market, taking around 150,000 b/d, while NOCs landed less than 100,000 b/d, according to Vortexa. Kpler data points to 414,000 b/d of Urals arriving in China in August. As the Ukraine war drags past its sixth month, market players in China and India are getting more comfortable with buying Russian crude. But it is Urals' cheapness that is mostly driving Chinese independents' rising demand, traders say.