In July, Russia remained the largest supplier of crude oil to China, although its deliveries in that month fell from previous record levels due to slightly lower price discounts that Russia granted, as well as stronger domestic demand hindering Russian exports.
Oil deliveries from Russia to China increased last month on a year-on-year basis by 13 percent, to 8.06 million metric tons in July or 1.9 million barrels per day, reported the Chinese General Administration of Customs. In the first seven months of this year, Russian deliveries increased by 25 percent year-on-year, to 60.66 million tons.
Oil deliveries from Saudi Arabia to China in July fell by 14 percent year-on-year and by 31 percent month-on-month, to 5.65 million tons.
Despite ongoing Western sanctions and price caps on Russian oil deliveries, Russian crude oil ESPO is increasingly being traded at prices closer to market prices, as strong demand from Indian and Chinese buyers reduces the price discounts caused by sanctions. The price of ESPO deliveries in July was $5 to $6 lower per barrel compared to the benchmark price in the London market, compared to the $8.50 discount that was granted for deliveries in March.
Analysts have estimated that domestic Russian demand will drive the overall decline in Russian exports. It is estimated that deliveries from Western Russian ports in July fell by 18 percent month-on-month, reflecting renewed domestic demand for processing in refineries.
