Chinese and Indian imports of Russian crude oil soared to record levels in May, as buyers took advantage of discounted supplies, a Reuters report said.
India and China imported around 110 million barrels in May, which was an increase of nearly 10 percent from the previous month, despite warnings from the United States against evading price caps. India and China are the world’s top two crude importers and major buyers of Russian oil.
Data indicates that India imported a record-breaking 66.7 million barrels of Russian oil in May, while Chinese imports increased to 49.2 million barrels.
The surge in Russian oil shipments comes just ahead of the meeting between the Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, on June 4.
Despite a 5 percent drop in Brent Futures this week, which currently stands at approximately $73 per barrel, producers are unlikely to deepen supply cuts at the upcoming OPEC+ meeting, sources told Reuters.
Indian refiners have increased their purchases of medium sour crude such as Urals, as well as lighter grades like Sokol and Varandey, alongside a steady flow of Espo crude from the Pacific port of Kozmino.
In China, refiners are striving to reduce feedstock costs and improve refining margins amid a slower-than-expected economic recovery. Private Chinese oil refiners began purchasing Russian oil earlier this year and have steadily increased their volumes in recent months.
The increased demand from Chinese buyers is attributed to higher profits on supplies due to softer freight rates and stronger differentials. Freight rates for tankers carrying Espo crude from Kozmino to northern China have decreased to $2.2 million, after reaching an all-time high of $2.4 million in mid-March.
(With inputs from Reuters)
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