Russian Oil Prices Soar in China Amid Iran Sanctions

Russian oil prices in China are rising due to a lack of alternatives for Chinese buyers. The premium on ESPO crude oil shipments scheduled for November has more than doubled compared to the previous week, reaching over $20 per barrel above Brent futures.

The growing demand for Russian oil is linked to reduced access by independent Chinese refineries to Iranian crude, as Washington blocks shipments from Iran. This shift in supply and demand has driven up prices for ESPO crude, which is delivered to Chinese ports within seven days.

Other Russian grades, such as VSTO and Urals, have also seen significant price movements on the Chinese market. While VSTO was previously sold at a premium to Brent, it shifted to a discount due to lower demand from Asian refineries. In contrast, Urals saw its discount narrow significantly in early September, down from $4.3 per barrel just a month earlier.