Saudi Arabia Trails Russia in Chinese Oil Market

Saudi Arabia Trails Russia in Chinese Oil MarketSaudi Arabia Trails Russia in Chinese Oil Market

Russia was China's largest crude oil supplier for a second month this year, customs data showed on Monday, with shipments in April surpassing imports from Saudi Arabia and hitting a record high as demand from independent refiners remained strong.

Crude imports from Russia surged 52.4% in April from a year ago to reach 1.17 million barrels per day, topping the previous record of 1.13 million bpd in December, Reuters reported.

April imports from Saudi Arabia fell 21.8% from a year ago to 1.0 million bpd, the official data also showed, but were still up from 936,500 bpd in the previous month. The record high import volumes from Russia were likely fueled by independent refiners who are storing oil that they had earlier purchased at lower flat prices, a trader with a Chinese company said.

Unipec, the trading arm of state-controlled oil refiner Sinopec, had also purchased large volumes of Russian ESPO crude for April delivery, a second trader said. The demand for Russian supplies is expected to fall in June as a rebound in oil prices is set to squeeze processing margins for refiners.

Independent refineries known as "teapots" have been a big client for the Russian ESPO grade due to low transportation costs and small cargo sizes. The teapots have also been a major contributor to China's total crude imports of 7.46 million bpd for the first four months of this year.

China's shipments from Iran fell 5.13% in April from the same month last year to 671,176 bpd, highest since June 2015. That compared with March's volume of 590,830 bpd.

Iran's oil exports are set to surge by nearly 60% in May from a year ago, with European shipments recovering to about half of pre-sanction levels. Iraqi shipments to China rose 11.25% in April on year to about 764,837 bpd. For the first four months of the year versus a year ago, imports from Iraq were up 10.24%.