China replaces India as the buyer of Russian oil from East Asia
Stuck cargoes of Russian Sokol crude, produced from the Sakhalin Island fields, previously bound for India but held up off the coast of South Korea and Singapore due to tough US financial sanctions, have started to head towards China, starting to clear a backlog of more than 10 million barrels of this type of crude oil sitting on tankers at sea.
China has increased purchases of Sokol in recent weeks and its independent refiners are expected to receive several such shipments this month, industry players told Bloomberg , which also noted that tankers loaded with Sokol and idling off the coast of Singaporeans have started moving towards the Chinese coast since December.
Tougher enforcement of G7 sanctions and related payment problems have curbed Indian purchases of some cargoes of Russian crude, with tankers previously bound for India turning back east, monitored tanker tracking data showed from Bloomberg earlier this year. It seems clear that Chinese refiners, who perhaps produce for the domestic market, are much less afraid of US sanctions. Furthermore, China, which has a significant export of finished products to Russia, does not have India's problems with direct payments in Yuan or rubles.
These small private refiners, competing with large state-owned enterprises, are medium-sized companies that work largely for the domestic market and are known for buying oil from the cheapest sources, with few scruples about its provenance. For them Sokol is fine.
Late last year, the United States took a tougher stance on sanctions against Russia and sanctioned several ships for violating the G7 price cap of $60 a barrel, above which cargoes cannot benefit of Western insurance and financing. Some of these tankers were already on their way to India loaded with Russia's Sokol grade and departed from Far Eastern ports in Russia.
According to Bloomberg, the first tanker carrying Sokol was unloaded this weekend in Pakistan, at a refinery west of the capital Karachi.
Meanwhile, major state refiners in India have become increasingly wary of engaging in contractual supplies of Russian crude, fearful of potentially running into tougher enforcement of U.S. sanctions on Russian oil exports, they told Bloomberg last week several sources familiar with the matter.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-sostituisce-lindia-come-acquirende-del-petrolio-russo-dallasia-orientale/ on Tue, 12 Mar 2024 15:50:38 +0000.