Seaborne

India set to overtake China as top importer of Russian crude transported by sea

India, fueled by its appetite for cut-price Urals qualities, is believed to have overtaken China as the top destination for Russian crude oil transported by sea this month. Overall Russian crude oil imports to India are expected to top 1 million barrels per day (bpd) in July, of which Urals crude accounted for 880,000 bpd in the first 25 days, according to a report. energy analysis company based in London. Vortexed.

Chinese imports of Russian crude oil transported by sea are expected to end July below those of India, although final Chinese figures are not available.

“China and India continue to transport Russian crude from the sea-borne market, with India likely to overtake China to become the top importer in July. This is the first time Indian imports of Russian crude transported by sea maritime exceed those of China,” said Emma Li, China analyst for Vortexa.

Russian Ural crude to China by ship was 300,000 bpd this month. China is getting more Russian ESPO Blend crude, favored by its mainly Shandong-based independent refiners. China is also buying ESPO Blend under a long-term contract through dedicated pipelines.

Russian crude oil transiting through pipelines is not included in this study. However, it is estimated that it only accounts for around 10-20% of all crude oil leaving Russia; the vast majority of the rest is by ships at sea, which are tracked by Vortexa. The share of pipelines was more than a third before the Russian-Ukrainian war. Much of it went to Europe.

India mainly buys Ural quality, shipped from Black Sea and Mediterranean ports, but has also started to take a different Russian quality shipped from the Far East, although this involves a route much longer sea.

Supplies from Russian Urals to India are down slightly – 3% – from June, but this gap can be closed by the end of July. Ural, a slightly heavier and higher sulfur grade than the ESPO blend, is suitable for Indian refineries and is available in adequate quantities, said R Ramachandran, oil industry consultant and former refinery manager at BPCL .

Russia has become one of India’s top three crude oil suppliers since the war began in late February. The invasion triggered sanctions from the United States and Europe, prompting Moscow to offer discounts of around $30 a barrel on the Urals.

“Apart from Iraq and Saudi Arabia, we believe it is the United Arab Emirates, the United States and Mexico that will see some of their flows replaced by Russian crude,” said Rohit Rathod, senior oil market analyst at Vortexa.

UAE oil supplies to India more than halved in May from April to 387,000 barrels a day, with Russian shipments more than doubling. U.S. oil supply fell 71% in May to 161,000 barrels per day from February before rising to 326,000 barrels per day in June.

Russia shipped 1.18 million barrels of crude a day in June, overtaking Iraq as India’s top oil supplier by 823,000 barrels a day in May, according to Vortexa data. Iraq supplied 1.13 million barrels per day in June and Saudi Arabia shipped 784,000 barrels per day compared to 976,000 barrels per day and 774,000 barrels per day in May, respectively.
Source: Trade Standard