Russia remained China's largest crude supplier in July, Chinese government data showed on Sunday, even as Russian shipments fall from all-time highs on narrower discounts and rising domestic demand crimps Russian exports.
Arrivals from Russia were up 13% from the same month last year to 8.06 million metric tons in July, or 1.9 million barrels per day (bpd), according to data from the General Administration of Customs.
For the first seven months of the year, Russian arrivals were up 25% from a year earlier to 60.66 million tons.
Shipments from Saudi Arabia, at 5.65 million tons, were down 14% from a year earlier and 31% from June.
Saudi exports to Asian refiners had been expected to fall in July, as Riyadh raised the July official selling price of its flagship Arab Light crude to Asian buyers to a six-month high. Saudi Arabia also announced plans for an extra output reduction in July, cutting output to 9 million bpd from 9.96 million bpd in June.
Despite continuing Western sanctions and a price cap on Russian shipments, Russian ESPO grade crude has increasingly traded closer to benchmark grades, as strong demand from Indian and Chinese buyers erodes the sanctions discount.
July-delivery ESPO shipments were priced at a $5-$6 per barrel discount to the ICE Brent benchmark, versus $8.50 against ICE Brent for shipments delivered in March, according to trading sources.
Stronger domestic demand in Russia was also expected to lead to an overall decline in Russian exports. Shipments from western Russian ports in July were estimated to fall 18% month-on-month, reflecting resurgent domestic refining demand.
Chinese refiners use intermediary traders to handle shipping and insurance of Russian crude to avoid violating Western sanctions.
Alternative suppliers have seen their shares grow to make up for lower Saudi and Russian shipments. Angola's shipments grew 27% from the previous month to 574,581 bpd in July.
Continuing the previous month's trend, U.S. exports to China jumped fivefold from a year earlier despite geopolitical tensions, as U.S. WTI output continues to surge amid OPEC+ supply cuts. U.S. crude shipments to China totalled 161,275 bpd in July, falling from 742,824 bpd in June as arbitrage margins narrowed.
Imports from Malaysia rose 16% from a year earlier to 911,926 bpd in July. Malaysia is often used as an intermediary point for sanctioned cargoes from Iran and Venezuela.
Here is the detailed trade breakdown, with volumes in million tons and on-year percentage change calculations by Reuters:
