China’s refiners have purchased a quarter of Russia’s Urals oil exports planned for June in the Baltic despite record high premiums for the grade due to a lack of sour barrels as result of the OPEC+ output cuts, traders said and shipping data showed.
Rising demand for Russian barrels will likely make oil firms more reluctant to extend the record oil cuts in tandem with OPEC+ for a prolonged period of time. Russia has to decide shortly as OPEC+ countries may meet this week.
Asian refiners, including those in China, have been hit by Saudi Arabia’s decision to slash supplies in June, causing them to seek replacements.
Some 1.1 million tonnes of Urals oil loading in the very end of May and during the first half of June will be shipped to China by Unipec, trading arm of Sinopec, and Shell, according to traders and shipping data in Refinitiv Eikon.
Urals loadings from Russia’s Baltic ports of Primorsk and Ust-Luga are planned at 4.4 million tonnes of June.
In June, Urals oil supplies to China will reach a record 2.2 million tonnes per month, Refinitiv Eikon flows data showed.
Most of the Urals barrels to arrive in Chinese ports in June were loaded in April, when the Russian grade traded at discount below $3 per barrel to dated Brent, while European benchmark was discounted by more than $4 per barrel to Dubai.