Beijing has begun purchases of three types of Arctic crude previously destined for the EU, Bloomberg reports
China has ramped up imports of a wider variety of Russian crude oil, including Arctic grades with a rare and less-known dense and highly sulfurous Arco, Bloomberg reported on Tuesday, citing oil-flow tracking data from Vortexa and Kpler.
The first purchases of Arco took place in November 2022, according to traders. Data from Kpler analytics also tracked Beijing’s latest purchases of Varandey crude and a lighter variety known as Novy Port in batches.
Deliveries are scheduled for this month and for February, when an EU ban on Russian petroleum products will take effect.
Some traders believe the development illustrates a rerouting of Russian supplies internationally, as well as China’s shift away from Middle Eastern imports of oil such as Iraqi grade Basrah Heavy. The increased imports of Arctic oil come after China’s daily crude and condensate imports hit the second-highest level on record last month, according to Kpler.
“The rerouting of Arctic grades is absolutely taking place,” lead oil analyst with Vienna-based Kpler Viktor Katona said, adding that “Russia’s Arctic grades were among the Europe-oriented streams that since December 5 have to find new homes elsewhere, and in all of those cases, it’s pretty much an India and China split.”
He pointed out that before the ban on Russian oil came into force on December 5, most of Russia’s Arco used to flow to the markets in the UK and the Netherlands, while Novy Port had attracted the focus of Dutch buyers. Western sanctions prompted Russia, once Europe’s biggest supplier, to divert its energy exports to Asian markets, with China becoming the top buyer of Russian oil.
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January 10, 2023 at 05:40PM