BEIJING, March 20 (TMTPOST) – China’s crude oil imports from Russia in January and February 2023 jumped by nearly 24% year-on-year to 15.68 million tons at an average price of approximately $539.64 per ton, down 11.71% from that of the previous year.

According to the data from China’s General Administration of Customs, Russia overtook Saudi Arabia as China’s largest crude oil supplier in the first two months of 2023. Saudi Arabia had been China’s top crude oil supplier since 2019, exporting 87.49 million tons of crude oil to China in 2022, equivalent to 1.76 million barrels per day. In the same period, Russia sold 86.25 million tons of crude oil to China, equivalent to 1.73 million barrels per day. However, China’s crude oil imports from Saudi Arabia in the first two months of 2023 totaled 13.92 million tons, or about 1.73 million barrels per day, down 4.7% year-on-year, while the average price climbed nearly 4% year-on-year.

After the Russia-Ukraine conflict, Western countries imposed sanctions on Russian crude oil and refined oil products, as well as price caps on its seaborne oil products. These measures reduced the buyer base and supply of Russian oil, causing it to trade at prices below international benchmarks. Since the start of 2023, the price of Russia’s Urals crude oil futures contract has fluctuated in the low $50 to $60/bbl range, closing at $47.87/bbl last Friday, representing a drop of nearly 45% from 2022. Meanwhile, according to the International Energy Agency’s (IEA) Oil Market Report for March, Russian shipments to the world market decreased by 500,000 bpd to 7.5 million bpd in February, likely due to the impact of sanctions.

According to the IEA, Asian buyers, including India and China, have been taking advantage of discounted Russian oil. In February, 40% and 20% of India’s and China’s total crude imports came from Russia. Furthermore, the two countries’ total Russian oil imports in January made up more than 70% of Russia’s exports for the month. As the world’s second-largest crude oil consumer, China’s demand for crude oil is expected to increase further in 2023, as its dynamic zero-Covid policy ended last December. The IEA predicts that global oil demand will rise by 2 million bpd to 102 million bpd in 2023, with almost half of the new demand coming from China’s oil consumption growth.

China is expected to continue increasing its imports of Russian crude oil due to the falling cost of importing Russian oil and the surge in demand following its reopening. Consulting firms Vortexa and Kpler predict that almost 43 million barrels of Russian crude will arrive in China in March 2023, including 20 million barrels of ESPO blend crude oil and 11 million barrels of Urals crude oil. The figure would surpass the previous all-time high of 42.48 million barrels in June 2020. Another estimate by Energy Aspects is that China’s crude oil imports from Russia may increase by 500,000 bpd to about 2.2 million bpd in 2023.