China slows down Urals crude buying ahead of US-Russia talks

Fewer deals were heard in China for the Russian Urals crude cargoes relinquished by Indian buyers this week, as market participants await indications from the upcoming US-Russia talks on Aug. 15, trade and refinery sources told Platts Aug. 14.

The US President Donald Trump and Russian President Vladimir Putin are set to meet in Alaska on Aug. 15 to discuss a potential ceasefire in Ukraine, which could impact energy trade.

"The talks may collapse, leading to stricter sanctions, or they could go well and maybe even lighten or lift the sanctions altogether. Hard to predict because it is Trump, we would prefer to wait," said a crude procurement source with a state-owned refiner.

Trump has previously warned of more secondary sanctions for countries buying Russian energy products after imposing a 25% tariff on India effective Aug. 7.

"Theoretically, China is able to absorb India's unwanted Russian crude. But diversification is increasingly important amid the geopolitical uncertainties, so are term deals with other main suppliers," said a Beijing-based feedstock planner.

China is the top Russian crude importer, both seaborne and via pipeline. The imports stood at 1.99 million b/d in the first half of 2025, despite falling 10.4% year over year, to account for 17.6% of the market share, customs data showed.

ESPO dominates the majority, with about 800,000 b/d via pipeline and more than 840,000 b/d delivered by vessels loaded from Far East Kozmino.

Urals deals

Market sources said Russia supplies about 2 million b/d Urals, which are loaded from Europe. Most of the cargoes typically go to India, partly due to the shorter voyage than to China.

However, as Indian buyers diversify their feedstock amid sanctions, offers for Russian Urals fell from ICE Brent futures plus $3/b in late July, on a DES China basis. As of Aug. 14, the latest offer for November delivery was at a premium of about $1/b to Platts Dated Brent, market sources said.

According to market sources, Chinese buyers have taken at least 11 million barrels from late July to the week ended Aug. 9.

The private mega refiner Yulong Petrochemical has been involved in the market since late July, and has since bought about 4 million barrels of Urals. The latest cargo it took was at a premium below $2/b against the ICE Brent Futures on a DES Shandong basis, according to market sources.

The remaining 7 million barrels were picked up by state-owned trading companies Unipec, PetroChina International, and Zhenhua Oil, sources said.

About 4 million barrels went to Unipec at Platts Dated Brent plus $2/b. PetroChina International took 2 million barrels and 1 million barrels for Zhenhua Oil.

Competitive choices

Other private mega refiners have shown no interest in Urals cargoes amid ample ESPO supplies, while the small independent refiners preferred the more competitive Iranian crudes, sources said.

"For most small-sized refineries, Urals is of poorer quality compared with Iranian Light, not to mention Russian ESPO," said another refinery source.

Russian ESPO crude, which is of a lower sulfur content of 0.6% compared with 1.5% for Urals, was offered at around $2.2/b against the ICE Brent Futures on a DES Shandong basis. Iranian Light was much cheaper at a discount of around $4/b on the same basis.

"There is no need for those refiners to switch to Urals cargoes," said another trade source.