A new situation is forming in the global energy market. After India sharply reduced its volumes of Russian oil purchases, the gap is being rapidly filled by China. Bloomberg reported this based on market data.
According to the information, India reduced its demand for Russian oil due to the additional tariffs imposed by the United States. However, refineries in Beijing began actively buying the crude rejected by India. As a result, the flow of oil in Asia changed sharply, and Chinese companies gained the opportunity to purchase more Urals oil coming from Russia’s western regions.
Previously, China mainly purchased crude supplied through Russia’s Far East. But starting from August, the situation changed: supplies of Urals oil through the Baltic region and the Black Sea reached 75,000 barrels per day. This is almost twice as much compared to the yearly average of 40,000 barrels. At the same time, India’s imports fell sharply to 400,000 barrels. In July, this figure had been 1.18 million barrels.
Experts see the main reason for this imbalance in U.S. trade policy. At the beginning of August, Washington doubled tariff rates against India. In this way, the U.S. sought to punish India for continuing to buy Russian oil. However, these restrictions were not applied to China — in order to preserve fragile trade agreements. As a result, Chinese companies gained free access to the volumes that India could not purchase.
“For Chinese refineries this situation is very favorable. They may continue to purchase Russian oil in the long term,” experts said. According to them, Urals oil is more competitive compared to Middle Eastern crude. The main reason is the large discounts from Russia and cheap logistics.
In recent days, it has become known that Chinese companies have already booked 10–15 Urals shipments for October–November delivery. Currently, two large tankers loaded with two million barrels of oil are stationed off the coast of Zhoushan.
Demand in the market is also high. At the moment, Urals oil is being traded about $1 more expensive than Brent. This clearly shows the strong interest among buyers.
Meanwhile, Indian refineries are showing almost no activity. Some are reviewing offers, but most are seriously concerned due to U.S. pressure.
Experts warn: if China reduces purchases in the future for any reason, Russia may find it very difficult to attract new buyers for its oil. In such a situation, Moscow will be forced to lower prices even further.
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