Russia’s pipeline oil exports to China are flat so far this year

Russia’s oil exports to China via the Eastern Siberia-Pacific Ocean (ESPO) pipeline were flat between January and October compared with the same period in 2021, according to China National Petroleum Corporation (CNPC) Vice President Huang Yongzhang.

Russia sent 33.26 million tons of oil to China via pipeline in the first ten months of this year, Huang was quoted as saying by Russian news agency TASS at a Russia-China energy forum.

While pipeline oil deliveries were largely unchanged this year, China has significantly increased its seaborne imports of Russian crude as Beijing and India have now emerged as the top buyers of Russian oil following the Russian invasion of Ukraine, as Western buyers shun Russia’s crude and prepare for The EU’s embargo against imports of Russian oil from 5 December.

Just ahead of the ban and the G7-EU price cap on Russian oil, some Chinese buyers have been hesitant to buy Russian cargoes as they await details on how the price cap would be enforced.

Still, both China and India are now demanding huge discounts for the Russian oil they are willing to buy, Bloomberg oil strategist Julian Lee wrote in a recent analysis.

Currently, China and India account for about two-thirds of Russia’s seaborne crude exports, and the Asian buyers are exercising the bargaining power they have over Russia, Lee notes. If Russia wants to continue selling its oil to its new top customers, it will have to contend with the deep discounts demanded by the two buyers.

At the end of last week, Russia’s flagship oil, Urals, was trading at $52 a barrel. barrel – a $33.28 discount to Brent Crude. This compares to the average discount in 2021 from Urals to Brent of $2.85.

The huge discount is costing the Kremlin about $4 billion in lost revenue each month, according to estimates from Bloomberg’s Lee.

By Tsvetana Paraskova for

More top reads from

Add a Comment

Your email address will not be published. Required fields are marked *