China remains top Russian crude importer in June as inflows hit all-time high

China's crude imports from Russia surged 44% year on year to an all-time high 2.57 million b/d in June, data from General Administration of Customs showed July 20, making it the top buyer of Russian crude.

India has been projected to have 40%-45% of its crude supplies, or max of around 2 million-2.3 million b/d from Russia.

China's Russian crude imports in June were up 12% from the previous high of 2.3 million b/d in May, contributing 20% to the overall market share.

On a metric-ton basis, the 10.5 million mt Russian arrivals also led June being the first time monthly shipments from a single supplier crossed the 10 million mt mark. The GAC releases data in metric tons that S&P Global Commodity Insights converts to barrels using a 7.33 conversion factor.

Market sources attributed the hefty imports to the country's top refiner Sinopec because independent refineries' volume remained below the peak level seen in March while PetroChina's increase was limited.

S&P Global Commodity Insights data showed China's independent refineries imported 1.15 million b/d of Russian crudes in June, lower than their 1.36 million b/d in March.

Meanwhile, PetroChina's increase in seaborne imports was likely less than 100,000 b/d in June from the previous months, Kpler shipping data showed, on top of steady pipeline imports via long-term contracts.

That brought crude arrivals from Russia to 2.13 million b/d, or 52.61 million mt, over January-June, a 27% year-on-year rise, the GAC data showed.

US crude imports hit 29-month high

In addition, crude arrivals from the US hit a 29-month high of 746,000 b/d (3.05 million mt) in June as the arbitrage window was open. The previous high was 851,000 b/d in December 2020 when Beijing stepped up efforts to comply with Phase 1 of the China-US trade deal.

Shipments originally from Canada, mostly heavy crudes, also crossed above 1 million mt for the first time to reach 1.12 million mt (274,000 b/d), meaning the volume from North America totaled 4.17 million mt, the highest since September 2020 when it was 4.2 million mt.

The heavy inflow was within expectations, and was similar to other buyers in Asia as the exchange of futures for swaps narrowed.

But the volume from North America was likely to fall in July and be replaced by crude from West Africa, such as Angolan oil.

Kpler data showed inflows from North America to slump by a half month on month in July, while Angolan crudes were estimated to hit multi-year high of 957,000 b/d since December 2019 when the flow was at 1.09 million b/d.

China imported 1.85 million mt or 452,000 b/d of Angolan crudes in June, a four-month low and a 21% year-on-year drop, GAC data showed.

Meanwhile, the downtrend in Saudi Arabia's crude deliveries halted in June with imports from the Middle Eastern giant rising 12% to 1.94 million b/d (7.92 million mt) from a three-month low of 1.73 million b/d in May.

Shipments from the OPEC kingpin averaged 1.88 million b/d in the first half of 2023, rising 7.5% year on year, but 11.6% below imports from top supplier Russia, the GAC data showed.

"Despite more sweet barrels flow in amid the narrow or even negative EFS , along with Russian crudes, China remains relies on Middle Eastern crudes due to refineries' configuration," said a source with Unipec, the trading arm of Sinopec.

In H1, Middle Eastern crude accounted for 47.7% of market share in China with an 1% year-on-year increase to 5.46 million b/d. The proportion fell from 52.7% in the same period of 2022, GAC data showed.

China's top crude suppliers (million mt)

Source: General Administration of Customs