Sinopec Bolsters Russian Oil Purchases Amid Middle East Supply Crunch

Sinopec Corp, China's largest refiner, has significantly increased its purchases of Russian oil to compensate for reduced supplies from the Middle East due to the ongoing Iran war. According to multiple trade sources and ship tracking data, Sinopec has bought a total of 30 to 40 shipments of Russia's Eastern Siberia-Pacific Ocean blend (ESPO) for July to September deliveries, equivalent to 5-6% of its processing capacity.

The ESPO purchases have helped Sinopec maintain relatively stable throughput and ship surplus fuel on strong export margins. The refiner secured about 7.4 million barrels of ESPO in July, mostly delivered into Rizhao port in the refining hub of Shandong province. For August and September, it has bought at least 10 cargoes each.

Sinopec's recent ESPO purchases have not involved sanctioned entities as counterparties and have been made via intermediaries. The company used to source nearly half of its crude from the Middle East, but since the Iran war, it has shifted towards barrels with greater delivery certainty and lower freight costs.