Sinopec Dials Up Russian Oil Imports Amid Middle East Supply Crunch

China's state-owned Sinopec Corp has increased its purchases of Far East Russian oil to offset supply cuts from the Middle East, according to multiple trade sources and ship tracking data. The refiner, the world's biggest, has bought a total of 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 equates to 5% to 6% of Sinopec's processing capacity of 5.2 million bpd.

Sinopec's purchases of Russian oil have helped it maintain relatively stable throughput and ship surplus fuel on strong export margins, despite China limiting overseas sales of fuel products from March to protect domestic supply amid the war-related trade disruptions. The refiner has secured about 7.4 million barrels of ESPO in July, mostly delivered into Rizhao port in Shandong province.

Sinopec's demand for crude appears to have bottomed out following the easing of fuel export restrictions, but the recovery remains selective, said Emma Li, lead China analyst with ship tracker Vortexa Analytics. The refiner has bought at least 10 cargoes each for August and September, according to Li and four traders who closely follow ESPO trade.