China Boosts Russian Oil Purchases Amid Middle East Supply Crunch

China's state-owned oil refiner Sinopec has increased its purchases of Russian crude oil from the Far East to compensate for reduced supplies from the Middle East due to the war against Iran, according to Reuters.

The company purchased a total of 30 to 40 cargoes of Russian ESPO (East Siberia, Pacific Ocean) crude for delivery from July through September, which represents 5% to 6% of Sinopec's total processing capacity of 5.2 million barrels per day.

This move has helped Sinopec maintain relatively stable throughput and ship surplus fuel at a high export margin despite China's restrictions on overseas sales of fuel products since March to protect domestic supplies amid trade disruptions related to the war, Reuters reports.

According to Emma Li, lead China analyst at vessel-tracking firm Vortexa Analytics, 'Sinopec's oil demand appears to have bottomed out after fuel-export restrictions were eased, but the recovery remains selective.'