Sinopec Diversifies into Russian Crude Amid Iran War Disruptions

China's state-owned Sinopec has increased its purchases of Russian crude oil to replace Middle Eastern supplies disrupted by the Iran war. The company, the world's largest refiner, bought between 30 and 40 cargoes of Russia's ESPO crude for delivery between July and September, equivalent to about 241,000 to 320,000 barrels per day.

This represents roughly 5 percent to 6 percent of Sinopec's 5.2 million barrels per day of refining capacity. The volumes are significantly higher than in previous months, when China sharply reduced oil imports due to the war in Iran.

Sinopec's recent ESPO purchases were made through intermediaries and did not involve sanctioned entities as counterparties, according to four people familiar with the transactions. The company has also continued paying for Russian crude in Chinese yuan.