China’s appetite for discounted Russian crude oil is set to reach a new high in February, even as global pressure mounts to curb Moscow’s energy revenues. Despite US President Donald Trump urging nations to halt purchases of Russian oil, China’s imports are projected to rise for the third consecutive month.
Preliminary data from Vortexa Analytics estimates Russian oil shipments to China at approximately 2.07 million barrels per day (bpd) for February delivery, up sharply from January’s 1.7 million bpd. Separate figures from Kpler suggest imports could reach 2.083 million bpd, compared to 1.718 million bpd the previous month.
The surge comes at a time when India — previously one of Russia’s largest buyers — is reducing its intake. Vessel-tracking data indicates India’s Russian crude imports may decline further to around 1.159 million bpd in February.
Deep Discounts Drive Chinese Demand
The shift in buying patterns has pushed Russian crude prices lower. Cargoes scheduled for January and February delivery to China have been trading at steep discounts of $9 to $11 per barrel against ICE Brent. These are among the deepest discounts seen in recent years for the Urals grade, which was historically directed toward India due to shorter shipping routes.
Since November, China has overtaken India as the largest importer of Russian seaborne crude. Western sanctions tied to the Ukraine conflict, coupled with diplomatic and trade considerations between India and the United States, prompted New Delhi to cut Russian oil purchases to a two-year low in December.
Competition with Iranian Crude Intensifies
In addition to Urals, export grades such as Sokol, Varandey, and Russia’s flagship ESPO blend from the Far East port of Kozmino have boosted supplies to China. The ESPO blend, geographically closer to China, has increased competition with Iranian crude.
Market participants note that concerns about potential US military action against Iran have unsettled Chinese independent refiners — commonly known as “teapots” — who are major buyers of sanctioned oil from Russia, Iran, and Venezuela.
A senior Chinese trader indicated that Russian crude currently offers better value relative to quality. ESPO was recently traded at discounts of $8 to $9 per barrel to ICE Brent for March delivery, while comparable Iranian Light crude was priced at $10 to $11 below the benchmark.
Iran Uncertainty Adds to Market Volatility
Ongoing uncertainty over possible US strikes on Iran — should nuclear negotiations falter — has made Chinese refiners cautious about securing Iranian cargoes. Analysts warn that potential military tensions could disrupt Iranian oil loadings, making Russian supplies appear more reliable.
Vortexa estimates Iranian oil shipments to China, often relabeled as Malaysian to circumvent sanctions, have fallen to around 1.03 million bpd in February from approximately 1.25 million bpd in January.
As geopolitical risks and shifting trade dynamics reshape global oil flows, China’s increasing reliance on discounted Russian crude highlights the evolving balance in international energy markets.
Originally published on 24×7-news.com.
