China and India are buying more crude oil, providing some respite for producers facing expectations of oversupply, Bloomberg reported today, citing unnamed trading sources.
The two large importers have been buying mostly Middle Eastern cargos, the Bloomberg sources said, noting that these were being sold at a discount, with China the bigger buyer and India raising its purchases since the start of the month only marginally.
Purchases so far in November featured more Upper Zakum grade shipments and additional volumes of Kuwaiti crude, the publication reported. Indian refiners also bought West African crude and some Qatari crude.
“There is a lot of supply in the market,” Manoj Heda, executive director of international trade at India’s state-owned Bharat Petroleum, said at an industry event, as quoted by Bloomberg. But “demand centers are only limited to China and India.”
China and India are the biggest buyers of Russian crude, which is currently being squeezed by the latest U.S. sanctions, prompting the buying countries to look for alternatives. Last month, however, Indian oil buyers ramped up their intake of Russian crude ahead of the new sanction package’s entry into effect, Finland-based Centre for Research on Energy and Clean Air reported. The outlet tracks Russian energy exports on a monthly basis.
Per CREA figures, India imported some 3.1 billion euros, or $3.6 billion, worth of Russian energy commodities, with crude oil making up 81% of the total and oil products making up another 7%. The remainder of Russian energy imports was coal. Crude oil imports from Russia in October booked an 11% increase on September, with two-thirds of that total going to private refiners. State refiners in India also ramped up Russian energy commodity imports, buying almost twice as much of these in October as they did in September. China, meanwhile, remained the biggest buyer of Russian energy commodities last month, ahead of the sanctions.
By Irina Slav for Oilprice.com
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