In a notable shift, Russia has surpassed Saudi Arabia to become China’s leading oil supplier in the past year.
This change underscores the limited success of Western sanctions aimed at restricting the Kremlin’s funds amidst the Ukraine conflict.
China, the largest oil importer globally, bought a record-breaking 107 million tons of Russian crude in 2023.
This quantity shows a significant increase, nearly one-quarter higher than the previous year, as revealed by recent customs data.
By contrast, China’s imports from Saudi Arabia were just under 86 million tons.
This marks Russia’s return to the top position for the first time since 2018, averaging around 2.15 million barrels daily.
Chinese refineries have actively sought Russian crude, often at prices lower than market rates. Despite the Western price cap of $60 per barrel, Russian oil frequently sells for more.
Factors Driving the Shift in Chinese Oil Imports
The popularity of Russian ESPO shipments, originating from the Far East, is due in part to the shorter shipping distances to China. Higher sale prices from Saudi Arabia have led Chinese processors to reduce their dependence on Saudi oil.
Moreover, a recent disagreement with Iranian exporters is further driving the demand for Russian crude.
The value of China’s oil imports from Russia in the last year reached $60.6 billion. This figure translates to an average price of about $77 per barrel, based on Bloomberg’s analysis of the customs data.
Iraq and Malaysia ranked as the third and fourth largest oil providers to China last year, respectively.
Interestingly, oil and fuel from countries facing sanctions, like Iran, are often recorded as originating from Southeast Asian nations in China’s official statistics.
Russia also dominated as China’s main fuel oil supplier in the previous year, exporting 9.6 million tons. Following Russia, Malaysia emerged as the second-biggest exporter, supplying 6.93 million tons.