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Russia remains China’s main supplier of crude oil

21 August 2023

Russia remained China’s largest supplier of crude oil in July, data published by the Beijing government showed on Sunday, even as Russian supplies fell from a previous record high as lower discounts and increased domestic demand hurt Moscow’s exports, Reuters reports.

Last month, Russian crude oil deliveries increased by 13% compared to July 2022, to 8.06 million metric tons, or 1.9 million barrels per day (bpd), according to figures published by the Chinese Customs Administration, according to Agerpres.

In the first seven months of this year, Russia delivered 60.66 million tons of crude oil to China, a 25% increase over the same period in 2022.

In July, deliveries from Saudi Arabia, of 5.65 million tons of crude oil, decreased by 14% compared to July 2022, and by 31% compared to June 2023.

Despite Western sanctions and a price cap on Russian crude, ESPO crude, which is exported to Asia, is priced close to benchmark oil prices as strong demand from India and China erodes the level of the sanctions discount.

In July, ESPO oil deliveries traded at a discount of $5-6 per barrel to the price of a barrel of Brent oil in the North Sea, while in March it was a discount of $8.5 per barrel, according to traders.

Stronger demand from Russia would lead to a general decline in Russian exports.

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