Oil imports from Russia to China are breaking records

Russia has become the largest supplier of crude oil to China for the second month since the beginning of this year. According to customs data, Russian shipments in April exceeded imports from Saudi Arabia and reached a record high, as demand from independent processors remained strong.

Imports from Russia rose 52.4 percent in April from a year earlier to 1.17 million barrels per day, surpassing the previous record of 1.13 million barrels per day in December. In April, imports from Saudi Arabia fell 21.8 percent from a year earlier to 1.0 million barrels a day, and official data also showed they were still higher from 936,500 barrels a day in the previous month.

Record high volumes of imports from Russia are fueled by independent refiners who receive oil previously purchased at lower prices, a Chinese company's trader said. Demand for Russian supplies is likely to fall in June as oil prices rebounded. “Chinese imports from Russia will remain stable in May but are likely to fall in June as independent refineries cut purchases following the April oil price surge,” said another crude oil trader from Beijing.

Independent factories, nicknamed "teapots", have become a major customer for Russia due to low transportation costs and small cargo sizes. These refineries were also a major contributor to the rise in China's total crude oil imports of 7.46 million barrels per day during the first four months of this year. In April, Saudi Aramco sold its first spot cargo to such a refinery. This suggests that the world's largest exporter is trying to expand its customer base in China outside of state-owned companies.

China's shipments from Iran rose 5.13 percent in April from the same month last year to 671,176 barrels per day. The geographic breakdown of Iranian oil exports posted a surge of nearly 60 percent in May from a year earlier, due to European shipments due to the lifting of sanctions. Iraqi shipments to China rose 11.25 percent in April to 764,837 bpd. During the first four months of this year, compared with a year earlier, imports from Iraq increased by 10.24 percent.