China Snaps Up Russia's Sokol Crude as Indian Buyers Turn Away - Yahoo Finance
China Snaps Up Russia’s Sokol Crude as Indian Buyers Turn Away
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Refiners in China, the world’s largest oil importer, are taking greater volumes of a crude grade from Russia’s Far East that’s largely being shunned by their counterparts in India amid sanctions concerns.
So far this month, the mostly private processors took an average of 168,000 barrels a day of Sokol, three times more than January’s pace and well ahead of the 53,000 barrels in 2023, according to data tracked by intelligence firm Kpler. Meanwhile, Indian flows were about 119,000 barrels a day this month after a halt in January and December, but down from 140,000 barrels last year.
China and India emerged as the top takers of Russian crudes including ESPO and Sokol following Moscow’s invasion of Ukraine in 2022. The war triggered a raft of US-led sanctions against Russia, as well as a price-cap mechanism on oil shipments. Initially, that led to Western buyers avoiding the cargoes, but since late last year, Indian refiners have also encountered difficulties, including issues with payments and disagreements about discounts.
The Chinese refiners bought their February-delivery Sokol cargoes at discounts of about 50 cents a barrel to ICE Brent benchmarks, according to traders who participate in the market. The grade — which is not a baseload for the teapots — has now drawn some interest given its discount compared with that for ESPO, usually a more popular choice, said the traders.
Reflecting the interruptions to flows to India, nearly 15 million barrels of Sokol meant for delivery to the country are at present on tankers idling off the coasts of Malaysia and South Korea. The vessels show little sign of moving, Bloomberg News reported this week.
Read More: Russia’s Crude Oil Delivery Problems to India Aren’t Over Yet
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