Chinese state-owned companies and Asian buyers still buy extra volume of oil. Even though they did it quietly because there was a prohibition from the United States (US) to buy oil from Russia.
According to sources familiar with this, companies such as CNOOC, PetroChina and Sinochem continue to supply oil cargoes from Russia for May delivery. In fact, state-run Sinopec as well as Asia's largest refining company is also involved, citing Reuters on Friday (8/4).
Chinese state-owned companies do not want to be seen as publicly backing Moscow by buying extra volumes of oil. After Washington banned Russian oil last month and the European Union imposed sanctions on top Russian exporters Rosneft and Gazprom Neft.
Sinopec and Petrochina declined to comment. CNOOC and Sinochem did not immediately respond to requests for comment.
China and Russia have developed increasingly close ties in recent years, and as recently as February announced a seamless partnership. China has refused to condemn Russia's actions in Ukraine or call it an invasion.
China, the world's biggest oil importer, is a major buyer of Russian crude with 1.6 million barrels per day, half of which is supplied by pipeline under government-to-government contracts.
A drop in Russian oil imports from China could prompt the nation's giant refiners to turn to alternative sources. This will add to global supply concerns that have pushed benchmark Brent oil prices to 14-year highs near $140 a barrel in early March after Russia invaded Ukraine in February.
Not only that, Asian buyers continue to buy one of Russia's main quality crude oil shipped from Eastern ports. Because the Sokol cargo for May loading to Asia has sold out, traders told Bloomberg on Thursday (7/4).
Crude oil from the Sakhalin I project has been sold either on a term or spot basis to South Korea, China and India, a Bloomberg source said. The voyage to deliver Sokol's cargo to Asia took only a week as the cargo was being loaded from Russian Far Eastern ports.
Buyers in Japan, South Korea, India and an independent Chinese refiner are reported to have purchased Sokol oil for May delivery. Exxon, will use its share of Sokol at its own refinery.
In forecasts earlier this week, Wood Mackenzie said advanced economies such as US allies, and the EU were expected to replace about 650,000 barrels per day of Russian crude with grades from other producers amid its own sanctions.
However, Asian oil importers are yet to race to buy Russian crude which has been heavily discounted due to short-term contractual obligations with Middle Eastern producers.
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