Sinopec Diversifies into Russian Crude Amid Middle East Shipping Constraints

China's top refiner, Sinopec, is pivoting to Russian crude in response to ongoing shipping constraints in the Middle East. According to trade sources and vessel-tracking data analysts, Sinopec has acquired 30-40 shipments of Russia's Eastern Siberia-Pacific Ocean (ESPO) crude for delivery between July and September.

The ESPO blend is loaded from Russia's Far Eastern port of Kozmino and takes about a week to reach China's east coast refineries. It is cheaper than similar grades from West Africa and Brazil, and provides greater delivery certainty and lower freight costs.

This shift in demand comes as China has slashed its overall crude oil imports amid the Middle East conflict. However, with fuel export restrictions eased, there may be a rebound in crude oil imports after the ten-year low seen in June.