China April crude imports from Russia top Saudis, hit record

Russia was China's largest crude oil supplier for a second month this year, customs data showed, with shipments in April surpassing imports from Saudi Arabia and hitting a record high as demand from independent refiners remained strong.

Crude imports from Russia surged 52.4 percent in April from a year ago to reach 1.17 million barrels per day (bpd), topping the previous record of 1.13 million bpd in December.

April imports from Saudi Arabia fell 21.8 percent from a year ago to 1.0 million bpd, the official data also showed, but were still up from 936,500 bpd in the previous month.

The record high import volumes from Russia were likely fueled by independent refiners, who are storing oil that they had earlier purchased at lower flat prices, a trader with a Chinese company said.

Unipec, the trading arm of state-controlled oil refiner Sinopec, had also purchased large volumes of Russian ESPO crude for April delivery, a second trader said.

The demand for Russian supplies is expected to fall in June as a rebound in oil prices is set to squeeze processing margins for refiners.

"China's Russia imports will remain stable in May, but are likely to drop in June as independent refineries reduce purchases after oil prices jumped in April," said another Beijing-based crude oil trader.

Independent refineries nicknamed "teapots" have been a big client for the Russian ESPO grade due to low transportation costs and small cargo sizes. The teapots have also been a major contributor to China's total crude imports of 7.46 million bpd for the first four months of this year.

In April, Saudi Aramco sold its first spot cargo to a teapot refinery, a sign the world's biggest exporter is trying to expand its client base in China beyond the state-owned companies.

China's shipments from Iran fell 5.13 percent in April from the same month last year to 671,176 bpd, highest since June 2015. That compared with March's volume of 590,830 bpd.

Iran's oil exports are set to surge by nearly 60 percent in May from a year ago, with European shipments recovering to about half of pre-sanction levels.

Iraqi shipments to China rose 11.25 percent in April on year to about 764,837 bpd. For the first four months of the year versus a year ago, imports from Iraq were up 10.24 percent.

Source: Hellenic Shipping News