On Monday, Reuters reported that tracking data and market sources indicate that Russian shipments of crude to China were almost halved in June compared to May, as refiners were facing a shortage of import quotas granted by the government.
China-bound shipments of Russia’s flagship Urals crude from Baltic and Black Sea ports fell 50% from June 1 to June 19, compared to one month prior, averaging 212,000 barrels per day (bpd), compared to 414,000 bpd one month prior, according to data from Refinitiv Eikon and calculations from Reuters.
The decline was being attributed by crude analysts to Chinese independent refineries lacking sufficient import quotas for oil, and that was reducing demand.
Viktor Katona, lead crude analyst at Kpler said, “In May, when June-loading cargos of Urals were trading, none of the private refineries in China knew the volumes of their import quotas. Having no quotas, they waited, and now they are able to buy July-loading barrels.”
The Chinese General Administration of Customs released data on Tuesday showed that in May, Beijing’s oil imports from Russia reached a record high in May, with private refiners continuing to rush to purchase any available ESPO or Urals crude, which was selling at discounts.
Last month, shipments of Russian crude rose by 15.3% year over year, and surged 32.4% in monthly terms, hitting 2.29 million bpd, compared to the 1.73 million bpd shipped in April.
In May, Russia once again overtook Saudi Arabia as the top supplier of crude to China, with Saudi Arabia exporting 1.72 million bpd, marking a decrease of 16% month-on-month, according to the figures.
May’s surge in Russian oil imports was primarily due to China’s independent refineries showing increased demand, according to analysts. However major refiners, such as Hengli Petrochemical also had a hand in the increase.
Ship tracking data showed that in the northeastern city of Dalian, a 400,000 bpd refinery owned by Hengli took delivery of its first Urals cargo of 730,000 barrels, as well as a total of 3.71 million barrels of ESPO.
