Chinese oil refiners have sharply increased their purchases of Russian Urals crude, taking advantage of discounted supplies abandoned by India after the United States imposed new trade tariffs.
According to analysts at Kpler and Energy Aspects, Chinese companies have already bought between 10 and 15 cargoes of Urals for October and November delivery — significantly more than their usual intake.
Shifts in Oil Flows
Although China traditionally sources most of its Russian oil from the Far East, in August shipments of Urals — exported through Baltic and Black Sea ports — rose to nearly 75,000 barrels per day. By comparison, the year-to-date average has been about 40,000 barrels. Meanwhile, exports of Russian crude to India have plunged to 400,000 barrels per day, down from an average of 1.18 million.
“Overall, Chinese refineries are in a comfortable position and can continue buying Russian oil, unlike Indian companies,” said Jianan Sun, an analyst at Energy Aspects Ltd. According to him, Urals remains competitive compared to alternative grades from the Middle East.
Washington’s Pressure
The global oil market is closely monitoring shifts in supply routes amid U.S. President Donald Trump’s diplomatic push to secure an end to the war in Ukraine. As part of this effort, Washington has doubled tariffs on all Indian imports, effectively punishing New Delhi for buying Russian crude.
In contrast, no comparable measures have been introduced against China, as a temporary trade truce with Beijing remains in place. This has put Chinese refiners in an advantageous position.
Last week, Trump announced that he would “hold off on raising tariffs on Chinese goods over Russian oil purchases,” citing progress in talks with Vladimir Putin about the war. Meanwhile, White House trade adviser Peter Navarro criticized India’s stance, calling its purchases “opportunistic and deeply corrosive,” while admitting that Washington cannot exert too much pressure on China without hurting itself.
India Under Pressure, China Benefiting
“One thing is certain: Trump will not do things if he knows they cannot be achieved,” said Mukesh Sahdev, head of commodity markets at Rystad Energy A/S. “By pressuring India, he has already succeeded and made an impact. But putting pressure on China? Probably not.”
China, Asia’s largest economy, continues to expand its purchases of Urals. “I would not be surprised to see more November-delivered cargoes bought by the Chinese in the coming days if prices remain attractive,” said Muyu Xu, senior crude analyst at Kpler.
According to traders, demand from Chinese refineries has already pushed Urals to a $1 premium over Brent, with no further discounts currently available.
Tanker Deliveries and Storage
Data compiled by Bloomberg show that at least two tankers carrying Urals — each with a capacity of 1 million barrels — are currently idling off China’s coast. The vessels, Georgy Maslov and Zenith, are anchored near Zhoushan, home to Zhejiang Petroleum & Chemical Co. and close to China’s strategic storage facilities.
Indian refiners, meanwhile, remain on the sidelines: although they continue to receive offers for Urals cargoes, they are not rushing to seal new deals, traders said.
“Excess Russian barrels still need to be absorbed, and only China can do that by sending them into storage,” Sahdev explained. “Without China buying, Russian crude would likely need to be discounted again to attract new buyers.”
Thus, Washington’s strategy has left India under economic pressure, while China has secured access to additional volumes of Russian crude. Experts note that Beijing now plays a pivotal role in sustaining Russia’s oil exports amid ongoing Western sanctions.
This article was prepared based on materials published by Bloomberg. The author does not claim authorship of the original text but presents their interpretation of the content for informational purposes.
The original article can be found at the following link: Bloomberg.
All rights to the original text belong to Bloomberg.
