Chinese refineries continue to receive flows of Russian oil, and Beijing is seeking to increase the pace of those flows in the coming times, through unannounced official moves with representatives of those refineries.
The increase in China’s imports of Russian oil reflects Moscow’s success in providing markets that can absorb its crude, instead of Europe, which restricted it with a ban on trading seaborne crude and a binding price ceiling.
Officials conducted In Beijing, with representatives of refineries – independent and state-owned – discussions regarding deals to import crude oil from Russia, in a move that reflects that crude imports from Moscow are of interest to China.
Last week, officials from the Chinese Ministry of Commerce met about 10 representatives of independent refineries. To inquire about the volumes and prices of its imports of Russian crude, according to what was recently published by Reuters.
Meanwhile, the ministry officials’ movements included meeting representatives of Chinese state-run refineries; To discuss policies related to trade in refined fuel products that were eased late last year (2022) to encourage exports, according to information monitored by the specialized energy platform.
Monitor the reality of refineries
Discussions by Chinese Ministry of Commerce officials with representatives of independent Chinese refineries focused on whether these facilities encountered any difficulties while importing Russian oil, according to relevant sources quoted by Reuters.
Chinese officials aimed to monitor the quantities that independent refineries can buy from Russian raw materials, and the extent of their “actual appetite” for them.
It also seems that officials of the Ministry of Commerce wanted to know the basics of dealing in such deals so that they would have a sufficient amount of knowledge about this matter, in the event of talking about increasing flows from Moscow.
Government refineries had a share of the attention of officials of the Ministry of Commerce in Beijing during the month of February, as they discussed refined fuel policies that were subject to easing with the aim of increasing exports at the end of last year (2022).
During the meeting, ministry representatives asked about the repercussions of the European embargo and the price ceiling imposed on Russian oil shipments transported by sea since December 5, the end of last year.
Prices and import volume
These unannounced discussions with representatives of Chinese independent refineries come as Chinese President Xi Jinping prepares for a possible visit to Russia, with Beijing’s top diplomat Wang Yi also visiting Moscow during his current European tour.
It should be noted that Russia offers significant preferential prices on oil purchases to both China and India in light of the recent Western sanctions imposed on it, including the European embargo and imposing a maximum price per barrel of oil transported by sea, according to information seen by the specialized energy platform.
China is one of the largest buyers of Russian oil since the Russian invasion of Ukraine, as Beijing’s imports from it last year amounted to an estimated 1.73 million barrels per day, an increase of 8.3% over the previous year.
The two state refiners, PetroChina and Sinopec, are resuming purchases of Russian seaborne oil, at preferential prices, after a short hiatus late last year (2022).
Inspite of that; The two companies decided to purchase shipments on a delivery basis only; This indicates that they are still taking a cautious approach in dealing with Russian imports.
The graphic below – prepared by the specialized energy platform – shows Russia’s exports of crude oil and oil derivatives by region:
Increase imports in 2023
State refiners are increasing their purchases of Russian oil, suggesting that imports could increase further once Beijing gives them the green light, according to Markets Insider.
Analysts at the energy research and commodity information company Energy Aspects indicated that China may witness an increase in its daily imports of Russian oil, during the current year (2023), by about 500 thousand barrels per day, to reach about 2.2 million barrels.
They expected that Beijing’s imports of Russian crude could achieve another jump, to rise to 2.5 million barrels, especially in light of government efforts to monitor the reality of Chinese refineries and their ability to absorb more supplies.
They said that the growth of China’s imports of Russian oil may increase significantly, starting next March and the following months, as revealed by the customs data issued in April.
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