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Chinese refiners pay record premiums for Russian ESPO crude

ESPO for November delivery traded at more than $7 per barrel above the market, with offers up to $10 over Brent, as China’s ESPO share slipped to 83% for the first seven months.

Reported · Written up by our desk · Energy

Chinese refiners are paying record premiums for Russia’s ESPO crude as they look to replace Iranian barrels that independent refiners were importing before the United States imposed its naval blockade on Iran, Oilprice reports.

ESPO for November delivery is trading at a premium of more than $7 per barrel, with some offers reaching as high as $10 per barrel over Brent, according to Bloomberg data cited by Oilprice.

The ESPO blend is loaded from Russia’s Far East coast and can reach Chinese buyers in less than a week. China remains the biggest buyer, taking 83% of ESPO for the first seven months of the year, down from 88% a year earlier.

Oilprice also notes that Indian refiners increased their ESPO market share from 12% to 16% over the same period, helped by a slump in overall Chinese oil imports between May and June and supply disruptions in the Middle East that delayed term cargoes expected by Indian refiners. Russia’s Far Eastern port of Kozmino oil exports rose 6% over the first seven months of the year, and India is importing more ESPO even though it takes longer to reach destinations and is costlier than Urals.

Latest closeWTI crude $90.70 ▲0.5%|Brent $95.32 ▲0.7%

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