MOSCOW (MRC) -- There are signs that China and India are pulling back from buying Russian crude oil ahead of the Group of Seven nations' proposed price cap and a European Union ban on imports, said Reuters.
However, the more important question for the market is whether any slowing by China and India of purchases from Russia is a temporary factor that will be reversed once participants figure out how to work with, or around, the price cap.
China, the world's largest crude oil importer, and India, the third-biggest, have increasingly turned to Russian crude this year, buying cargoes at steep discounts as Moscow sought to keep up export volumes after Western countries shunned its oil.
The G7 price cap and the EU ban on imports are aimed at cutting the revenue Russia receives from its exports of crude oil and products and are part of efforts to punish Moscow for its Feb. 24 invasion of Ukraine. Russia calls its actions there "a special operation".
Chinese refiners have begun slowing their purchases of Russian crude for December arrivals, according to traders and industry players in China.
The reduced volumes from Russia for December come after several months of strong imports. China is forecast to bring in 1.80 million barrels per day (bpd) of Russian crude in November, up from October's 1.69 million bpd and in line with September's 1.82 million bpd, according to data compiled by Refinitiv Oil Research.
It is also likely that Russia will overtake Saudi Arabia as China's biggest supplier of crude in November, with the two leading members of the OPEC+ group having swapped the top spot several times so far this year.
We remind, China’s State Administration for Market Regulation has approved unconditionally the acquisition deal of Shanghai SECCO Petrochemical between Sinopec and INEOS. Sinopec and INEOS in July this year announced the transaction, under which INEOS will take over 50% of SECCO from Sinopec.