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Chinese refiners pull forward Russian oil buys amid Middle East risks
Bloomberg cited trade sources saying the ESPO discount to ICE Brent tightened to about $1 per barrel from $3 to $4 two weeks earlier.
Chinese refiners bought all August crude cargoes loading from Russia’s Far East port of Kozmino weeks earlier than usual as heightened Red Sea and Middle East shipping risks disrupted tanker routes, Bloomberg reported.
The faster purchasing pushed the price of Russia’s Far Eastern ESPO crude blend to a discount of just about $1 per barrel to ICE Brent, compared with a discount of roughly $3 to $4 per barrel two weeks earlier, according to the report’s trade sources.
The supply concerns intensified after attacks on vessels in the Red Sea and broader disruptions in Middle East shipping lanes, with the Strait of Hormuz described as effectively closed and tanker flows from the Persian Gulf ending abruptly after about three weeks.
Oil prices have also been impacted, with the article noting Brent returning to around $100 per barrel again while Houthis in Yemen target tankers in the Bab el-Mandeb Strait, prompting Chinese buyers to secure alternatives ahead of schedule.
Latest closeWTI crude $92.23 ▲6.2%|Brent $100.54 ▲6.9%