Sinopec Ramps Up Russian Oil Purchases Amid Middle Eastern Supply Crunch

China's state-owned Sinopec Corp has significantly increased its purchases of Russian oil to offset reduced Middle Eastern supplies due to the Iran war. According to multiple trade sources and ship tracking data, Sinopec 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 represents around 5% to 6% of the refiner's processing capacity of 5.2 million bpd. Sinopec has been seeking cheaper alternatives to Middle Eastern oil, as its crude demand appears to have bottomed out following the easing of fuel export restrictions but remains selective, said Emma Li, lead China analyst with ship tracker Vortexa Analytics.

The ESPO purchases have helped Sinopec maintain relatively stable throughput and ship surplus fuel on strong export margins. The refiner has been buying at least 10 cargoes each for August and September, according to Li and four traders who closely follow ESPO trade.