China’s Refiners Pay Record Premiums for Russian ESPO Crude Amid Sanctions
China’s refiners are paying record premiums for Russian ESPO crude as cheap sanctioned barrels from Iran dry up and Venezuelan oil moves onto the open market. November-loading ESPO from Kozmino is trading at more than $7 per barrel over Brent, with some offers to independent refiners reaching $10, according to traders cited by Bloomberg and OilPrice.com.
This sharp reversal from deep discounts China extracted for years highlights the reliability premium that ESPO has gained as a result of Iranian barrels being hit by a U.S. naval blockade and Middle East shipments remaining disrupted. ESPO is now the closest, lightest, and most contested alternative to these sanctioned grades.
China’s Decade-Long Shift in Crude Imports
China’s crude imports rose from roughly 381 million metric tons in 2016 to a record 578 million tons in 2025 (about 11.6 million bpd). Official customs data and tanker-tracking estimates show a clear pattern: Russia became the top supplier, Saudi volumes stayed large but lost share, and “Malaysian” barrels exploded as a label for rebranded Iranian and Venezuelan crude.
Russia’s official volumes climbed from about 52.5 million tons in 2016 to a peak of 108.5 million tons in 2024 before easing to 100.7 million tons in 2025. Saudi Arabia peaked near 87–88 million tons in 2020–2022 and slipped to about 81 million tons in 2025. Malaysia (the main proxy for disguised sanctioned oil) jumped from a few million tons to more than 70 million tons in 2024. Iraq and Brazil also gained. Official Iran and Venezuela numbers collapsed after sanctions, even as Kpler and others tracked 1.38 million bpd of Iranian crude and 389,000 bpd of Venezuelan crude into China in 2025.
Premiums Over Discounts: A New Era for Chinese Refiners
The decline in sources that can offer discounts to China is a major shift in the oil markets. It calls into question how OPEC and OPEC+ will survive, and it looks like Russia may be the winner in a post-Ukraine war scenario. The premium paid by Chinese refiners for Russian ESPO crude reflects this new reality.
In the past decade, China used its buying power to extract large discounts from sanctioned producers. However, with Iranian barrels being hit by sanctions and Middle East shipments remaining disrupted, the market has flipped to a premium for ESPO. This shift is likely to have significant implications for the global oil market and the countries involved in it.
Conclusion
The record premiums paid by Chinese refiners for Russian ESPO crude highlight the new reality of the oil markets. As sanctioned barrels from Iran dry up and Venezuelan oil moves onto the open market, Russia’s ESPO has become the closest, lightest, and most contested alternative. This shift is likely to have significant implications for the global oil market and the countries involved in it.
Original Article: Chinese refiners are paying record premiums for Russian ESPO crude as cheap sanctioned barrels from Iran dry up and Venezuelan oil moves onto the open market. — Energynewsbeat