Sinopec Diversifies Crude Supplies with Record ESPO Imports

China's state-owned refiner Sinopec has significantly increased its imports of Russian crude oil from the Eastern Siberia-Pacific Ocean (ESPO) to offset reduced supplies from the Middle East following disruptions linked to the Iran conflict. The company, which is the world's largest oil refiner by processing capacity, sourced nearly half of its crude oil requirements from Middle Eastern exporters before the conflict.

The shift in procurement strategy was prompted by supply uncertainties and higher prices from traditional suppliers. Sinopec secured between 30 and 40 cargoes of ESPO crude for delivery between July and September, equivalent to approximately 241,000-320,000 barrels per day (bpd). These volumes account for around 5-6% of the company's refining capacity.

Russian ESPO crude has become an attractive alternative due to its competitive pricing. Market participants reported that September-loading ESPO cargoes traded at discounts of $1-2 per barrel against Brent crude, making them nearly $10 per barrel cheaper than comparable grades such as Oman crude and Brazil's Tupi blend.