Tankers Carrying Russian Crude Headed to China Amid Shift in Global Oil Trade
Tankers carrying up to 12 million barrels of crude oil are either en route or waiting offshore in East Asian waters, signaling a significant shift in the global oil trade as India pulls back from purchasing Russian oil. According to data intelligence firm Kpler, cited by Bloomberg on Friday, five tankers are currently “for orders” or “China for orders,” indicating that their cargo does not have a designated destination port or buyer.
The accumulation of tankers with Russian crude in East Asian waters suggests that sellers are looking to offload the cargoes in China after several Indian refiners temporarily halted purchases of Russian oil following the U.S.-India trade deal. This development comes as Russia’s flagship Urals crude grade, shipped from its Baltic Sea port and mostly destined for India, has seen discounts widen to $12 per barrel below Brent.
Discounts Widen for Russian Crude Amid Shift in Global Oil Trade
The widening discount of the ESPO blend that Russia ships from the Kozmino port in the Far East has reached almost $9 per barrel to ICE Brent, up from the $7-$8 a barrel discount of the past months. This increase in discounts is a clear indication that China has become the “safest” destination for Russia’s oil. Trade sources told Reuters earlier this week that Russian crude is being offered in China at widening discounts to attract Chinese refiners.
The shift in global oil trade is largely driven by India‘s decision to temporarily halt purchases of Russian oil following the U.S.-India trade deal. As Indian refiners wait for guidance on how to proceed with the oil trade, sellers of Russia’s crude are looking to attract additional purchases in China with hefty discounts of the Russian blends to Brent.
Global Oil Trade Dynamics Shift as India Pulls Back from Russian Oil
The global oil trade dynamics have shifted significantly as India pulls back from purchasing Russian oil. The U.S.-India trade deal has led to a temporary halt in Indian refiners‘ purchases of Russian oil, creating an opportunity for China to become the primary destination for Russia’s crude. As a result, tankers carrying Russian crude are now headed to China, where discounts have widened to attract Chinese refiners.
The development highlights the complexities and dynamics of the global oil trade, which is heavily influenced by political and economic factors. The shift in global oil trade dynamics underscores the importance of understanding the intricacies of international energy markets and their implications for the global economy.
Original Article: Oil tankers wait offshore as Russia redirects barrels to China – Oil & Gas 360 — Oilandgas360