Sinopec Boosts Russian Oil Imports to Offset Middle East Supply Crunch

China's state-owned Sinopec Corp has increased its purchases of Russian oil to offset supply cuts from the Middle East, according to multiple trade sources and ship tracking data. The company, which is the world's biggest refiner, has bought 30 to 40 shipments, or about 241,000 to 320,000 barrels per day (bpd), of Russia's Eastern Siberia-Pacific Ocean (ESPO) blend for July to September deliveries.

This is a significant shift from Sinopec's previous reliance on Middle Eastern oil. Before the Iran war, the company sourced nearly half of its crude from the Middle East and was among Saudi Arabia's biggest customers. However, since June, it has cut its overall crude imports by steep levels, with purchases plunging 41% from year-earlier levels.

Sinopec's recent ESPO purchases have been made via intermediaries and not involved sanctioned entities as counterparties. The company has also used Chinese yuan for these transactions, which is a departure from its previous practice.