MOSCOW: China and India, two of Russia’s biggest crude oil customers, have reportedly purchased cargoes of Russian crude at prices above the $60 per barrel price cap set by the G7.
Traders and industry sources said that the Urals, Russia’s flagship crude grade, is now trading above the price cap and is mainly being shipped to China and India this month.
Data from Refinitiv Eikon cited by Reuters revealed that India is estimated to account for more than 70% of the Urals shipments in April, while China is receiving 20% of those shipments. The two Asian nations have not joined the so-called Price Cap Coalition of mostly Western countries that imposed a price cap on Russia’s oil if the cargoes are using Western insurance, financing, and shipping.
The rising price of Urals has been attributed to the OPEC+ announcement of additional cuts through the end of the year. This development has caused concerns among Western nations, who are hoping to hurt Russia’s oil revenues by imposing the price cap.
Russia becomes China’s top crude oil supplier
Russia has become China’s top crude oil supplier, overtaking Saudi Arabia, which was the world’s number-one supplier of oil to China last year, Chinese customs data reveals. China’s imports of crude oil from Russia jumped by 23.8% year over year (YoY) to 1.94 million barrels per day in January and February 2023, as the country accelerated the buying of cheap Russian oil at discounts to international benchmarks.
India, on the other hand, has also been increasing its imports of Russian oil to record levels. Russia remained India’s main oil supplier for a fifth consecutive month in February.
Russia’s weekly crude oil exports by sea returned to more than 3 million bpd in the week to April 14, bouncing back from the previous week’s low, data from vessel-tracking services gathered by Bloomberg showed earlier this week. The majority of those exports are going to China and India.
The news of China and India buying Russian crude above the G7 price cap is likely to cause further tensions between Russia and Western nations. It remains to be seen how the situation will develop in the coming weeks and whether the G7 will take any action to address the issue.
