According to data from the company Kpler, this month Russian supplies to China are estimated at 1.15 million barrels per day, which is 16% more than in February and is the largest daily volume since December.
As Bloomberg writes, oil shipments loaded in April, sent from Russia's Pacific port of Kozmino to China, are offered at a premium of $2.50 per barrel to the benchmark Brent compared to about $3 for March shipments, traders working with this grade report. Small Chinese refineries are taking advantage of this. Previously, they relied on Iranian oil, but due to stricter US restrictions, it became unprofitable to purchase it.
Chinese buyers are returning to the Russian ESPO oil market due to lower prices because intermediaries have found workarounds to ease American sanctions.
Broad American sanctions, imposed by the outgoing Biden administration in early January, disrupted the flow of Russian oil to China after 161 tankers were blacklisted. However, gradually, non-sanctioned vessels helped fill this gap, and unloading occurs in small private ports.
The cost of delivering ESPO oil to China sharply increased after the sanctions were imposed in January, and buyers faced an unusual two-tier pricing mechanism: either accept the risk of shipping cargo on a blacklisted tanker at a lower price or pay a high premium of $5 or more for oil delivered on non-sanctioned vessels. Other Russian grades from the Far East — Sokol and Sakhalin blend — remain restricted by American sanctions, but workarounds for ESPO are bringing trade and pricing back to normal levels and increasing the overall flow of Russian oil, notes Bloomberg.
Nevertheless, as the agency writes, the refusal of some of China's largest state-controlled importers to buy Russian oil still led to unsold shipments in March, despite plans for April gaining momentum.