The green light comes just as demand for transportation fuel is rebounding in China, the world's number two oil consumer, after it ended its zero-COVID policy. PetroChina will receive about 1.5 million barrels of Urals crude later this month onboard Aframax tankers NS Arctic and Crudemed at its 200,000 barrels-per-day refinery in Qinzhou, Guangxi province, according to trade sources and shiptracking data from Refinitiv and Kpler. The refinery last imported 730,000 barrels of Urals crude each in October and November, the data showed. Unipec, the trading arm of Asia's top refiner Sinopec , is also set to resume imports although it is not immediately clear the volume it has bought and where it will be delivered, five sources familiar with the matter said.
Sinopec and PetroChina did not immediately respond to a request for comment.
"It's not a surprise to see China's state-owned refiners taking Russian oil at this moment," said a China-based oil trader. "Prices of Urals are well below the price cap, and the cheap feedstocks are timely as they would increase refining throughput when China's demand picks up." March-loading Urals crude is traded at a discount of about $13 against ICE Brent on a delivered ex-ship basis versus a discount of $7 two months ago. Unipec was one of the major buyers of Russian crude oil last year when western countries shunned trade with Russia in the wake of its invasion of Ukraine.
Sinopec refineries in Maoming, Zhanjiang, Ningbo and Tianjin cities have previously received Urals crude. Sinopec is last seen taking a 730,000 barrels of Urals cargo in November, Kpler data showed. 'MINIMISE THE RISKS' Both PetroChina and Unipec are allowed to buy only Russian crude delivered to China from trading companies that handle payments to Russian producers, arrange for shipping and insurance, sources familiar with the matter said. None of the companies is breaching sanctions, the sources said. Neither are they using western ships or insurance permitted in the Russian price cap mechanism devised by the Group of Seven nations, the European Union, and Australia aimed at curbing Russia from funding its war in Ukraine, they added. Under the mechanism, companies involved in the deals have to show U.S. officials documents proving that the price of Russian crude is below $60 a barrel. By going through middlemen, it shields Chinese majors from U.S. scrutiny of their trades, the sources said. "That is a way (for companies) to minimise the risks in shipping and insurance process," said a Singapore-based oil trader. Another source said shipping and insurance remained obstacles in the Russian oil trade as Russian financial institutions and insurance companies are mostly under sanction and it would be difficult for them to issue payouts if accidents happened. China's imports of Urals plunged to only 1.45 million barrels in December from a peak of 9.67 million barrels in August, Kpler data showed. But it rebounded in January and is expected to rise more in the coming months, traders said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ China's imports of Russian Urals crude ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Muyu Xu and Florence Tan, Additional reporting by Chen Aizhu; editing by Robert Birsel)
