Russia held on to its position as China’s top crude oil supplier ahead of Angola and Saudi Arabia for the seventh straight month in September.
According to a breakdown of commodity trade data released by the General Administration of Customs, , imports from Russia in September were almost 1.545 million barrels per day, up 60.5 per cent from the same month in 2016.
It showed that for the first three quarters, crude volumes from Russia gained 18 per cent year-on-year to nearly 1.2 million bpd, also holding firm its top ranking.
The lower cost of Russian crude and China’s shift to cleaner diesel was the key driver behind the record Russian oil purchases.
“Many teapot refineries are not equipped with hydrotreating units to cut down sulfur. That means they need to import crude with lower sulfur content to meet the cleaner diesel quality,” said Harry Liu of consultancy IHS Markit.
The widening spread between Brent-linked crudes and Middle Eastern benchmark Dubai also made Russia’s ESPO grade, priced off Dubai, relatively attractive, Liu added.
Meanwhile Angola, China’s second largest source of crude, supplied 11.7 per cent more oil than a year earlier at 1.14 million bpd.
Angola also maintained the second spot for the January-September supplies ahead of Saudi.
Supplies from Saudi Arabia were up 9.6 per cent in September year-on-year at about 1.04 million barrels per day (bpd).
Shipments for the January-September period dipped 0.6 per cent on year at 1.03 million bpd.
Russian supplies could climb further in 2018 as privately run conglomerate CEFC China Energy agreed earlier this month to buy 220,000 to 260,000 bpd of oil from Rosneft, as part of a $9.1 billion investment in the world’s largest listed oil company.
Shipments from Iran were up 59 per cent in September from a year earlier to 784,060 bpd.
Traders with knowledge of Iran’s oil sales said the hefty growth was spurred by resumption of condensate lifting and as Chinese firms lifted more oil from joint venture productions in Iran.
U.S. supplies in September were 120,580 bpd, up 260 per cent on year, and for the January-September totaled 127,150 bpd, after the country started exports to China in 2016.
China’s total crude oil imports in September climbed to the second highest on record at around nine million bpd, buoyed by purchases from CNOOC and as independent refineries returned from maintenances.