MOSCOW (MRC) -- Russia remained China's second-largest source of crude oil in 2022, following repeat top supplier Saudi Arabia, as Chinese refiners snapped up low-cost Russian barrels while Western countries shunned them after the Ukraine crisis, said Reuters.
China's crude oil imports from Russia jumped 8% in 2022 from a year earlier to 86.25 MMt, equivalent to 1.72 MM barrels per day (bpd), data from the General Administration of Customs showed on Friday.
Russian crude has been trading in widening discounts to global oil benchmarks following Western sanctions over its invasion of Ukraine, which the Kremlin has called a "special operation". China, which refused to condemn the attack, cranked up procurement of Russian barrels and has largely ignored the sanctions imposed by Western nations on seaborne Russian crude from Dec. 5.
In December, it brought in 6.47 MMt of crude oil from Russia, or 1.52 MMbpd, compared to 1.7 MMbpd in the same period in 2021. China's state-backed refiners have wound down the purchase of Russian oil since November, but the independent refineries have continued buying from intermediary traders who arrange shipping and insurance, shielding them from the risk of secondary sanctions. Saudi Arabia shipped a total of 87.49 MMt of crude to China in 2022, equivalent to 1.75 MMbpd, customs data showed, on par with the level in 2021.
China's state-backed oil refiners largely fulfilled their term contracts with Saudi in 2022 despite the sluggish domestic demand. Saudi Arabia is expected to remain a key, if not the dominant, crude exporter to China after President Xi Jinping's visit to Riyadh in December, where he told Gulf leaders that China would work to buy oil in Chinese yuan, rather than U.S. dollars. Customs data also showed that crude imports from Malaysia almost doubled in 2022 to 35.68 MMt.
The Southeast Asian country is a transfer point for sanctioned shipments originating from Iran and Venezuela. No Venezuelan crude imports were recorded by Chinese customs throughout 2022 and a total of 780,392 tons of crude oil from Iran arrived in China.
China is Iran's biggest oil buyer, but most Iranian exports are rebranded as crude from other countries to evade U.S. sanctions. Vortexa, a ship tracking specialist, assessed that China's December imports of Iranian oil rose to a record of 1.2 MMbpd, up 130% from a year earlier. Crude shipments from the United States reached 7.89 MMt in 2022, down 31% year-on-year.
We remind, China Petroleum & Chemical Corporation officially published the “China Energy Outlook 2060” (the “Outlook”) on December 28 in Beijing. This is Sinopec’s first publicly released research findings of their medium and long-term energy outlook, providing a new perspective for the scientific planning of transformation and development of China’s energy and chemical industries. This in the context of the “Dual-Carbon” goals laid out by the Chinese government, with the core goal of achieving carbon neutrality by 2060.