Sinopec Diversifies into Russian Oil as Middle East Supplies Squeeze
China's Sinopec Corporation has increased its purchases of Russian oil to offset supply chain disruptions caused by the Iran war, according to multiple trade sources and ship tracking data.
The world's biggest refiner, Sinopec, has bought a total of 30-40 shipments of Russia's Eastern Siberia-Pacific Ocean (ESPO) blend for July to September deliveries, with each shipment carrying around 740,000 barrels. This amounts to 5-6% of the company's processing capacity of 5.2 million barrels per day.
These purchases are significant as Sinopec has reduced its overall crude imports by steep levels since the start of the Iran war, with June purchases plunging 41% from year-earlier levels. However, it has relaxed fuel export curbs for July and August.
The refiner secured about 7.4 million barrels of ESPO in July, mostly delivered into Rizhao port in Shandong province. Sinopec has also bought at least 10 cargoes each for August and September, according to traders who closely follow ESPO trade.
ESPO is typically shipped in Aframax vessels capable of carrying 740,000 barrels. The recent ESPO purchases have not involved sanctioned entities as counterparties and have been made via intermediaries, people familiar with the matter said.