RUssland sold more oil to China in May than ever before, making it the largest oil supplier in the People’s Republic. China imported nearly 8.42 million tons of crude oil from Russia last month, Beijing Customs officials said on Monday. That’s almost two million barrels per day (bpd) and 55 percent more than a year ago and about a quarter more than in April.
After 19 months, Russia has again ousted Saudi Arabia from being China’s largest oil supplier. Chinese companies such as the refinery giant Sinopec benefited from sharp price reductions after western oil companies and trading houses withdrew from the Russian market due to sanctions over the Ukraine war.
Saudi Arabia delivered 7.82 million tons or 1.84 million barrels of oil to China in May, nine percent more oil than in the previous year. That’s down about 15 percent from April’s 2.17 million bpd. In May, the European Union decided to largely ban imports of Russian oil. However, this only affects transports with oil tankers by sea. Pipeline oil was excluded from the embargo at the urging of Hungary in particular. The EU embargo should also take effect with transition periods.
Russians also accept other currencies
China is not the only beneficiary of Western sanctions. India is also expanding its raw materials business with Russia at dumping prices. The world’s second largest country by population has recently multiplied its coal and oil imports from Russia within a year, according to internal data from the Indian government. Russian commodity traders are selling coal to Indian buyers at discounts of up to 30 percent, several insiders said. The Russian-Indian coal trade should also flourish in June, shipping data on Refinitiv Eikon show.
Meanwhile, Russia has become India’s second largest oil supplier after Iraq – and has pushed Saudi Arabia into third place. Because Russian oil is traded on the markets at record discounts compared to other types due to the drop in demand. Indian refineries, which previously shied away from the high transport costs for Russian oil, have since resorted to it. India, which also gets a large part of its arms from Russia, is trying to maintain a neutral stance on the Ukraine war.
According to Indian government data, the value of Indian oil imports from Russia has increased more than 31-fold to $2.22 billion in a year. A 20-day period up to last Wednesday was compared with the corresponding period last year. During the same period, the value of India’s imports of coal and related products increased more than six-fold to $331.17 million.
According to an insider, Indian customers such as power plant operators and cement manufacturers are happy about the concessions made by their Russian suppliers, who even waived the usual payment in dollars. “Russian merchants are generous with payment methods and also accept Indian rupee and UAE dirham,” said the insider. “Price discounts are attractive and this trend of higher coal imports from Russia will continue.” Branches of Russian coal traders such as Suek AG, KTK and Carbo One in Dubai, Singapore and elsewhere have offered price discounts of 25 to 30 percent, several insiders said.