China pivots to Saudi Arabian oil, cutting Russian imports by 36%

China is shifting from Russian to Saudi oil, according to tanker traffic statistics from the data analytics firm Kpler, as reported by the Reuters news agency. This month, China has significantly reduced its purchases of Russian oil while increasing its crude oil supply from Saudi Arabia.

Russia’s share of Chinese imports declines as Saudi Arabia takes the lead

According to Kpler’s calculations, China will import 926,000 barrels of oil per day from Russia this month. This amount represents a 36% decrease compared to last month’s shipments, which reached 1.45 million barrels.

An almost equivalent increase was observed in purchases from Saudi Arabia. Chinese refineries will import 1.78 million barrels of oil per day from the country this month, approximately 500,000 barrels higher than the previous month’s level of 1.2 million barrels.

Consequently, Russia will cede its position as China’s top oil supplier to Saudi Arabia.

Indian refineries halt purchases

Meanwhile, India increased its purchases of Russian oil this month. The country, which bought 1.7 million barrels per day in October, saw that figure rise to 2.26 million barrels this month. However, a significant drop in Russian oil flows to India is expected in December.

The country’s five largest refineries—Reliance Industries, Bharat Petroleum, Hindustan Petroleum, Mangalore Refinery and Petrochemicals, and HPCL-Mittal Energy—have opted out of receiving next month’s shipments.

According to Bloomberg data, only the state-owned company Indian Oil and Rosneft-affiliated Nayara Energy are currently purchasing Russian oil.

Indian Oil buys crude from non-sanctioned companies, while Nayara Energy continues to work exclusively with Russian-origin barrels.

Demand for Middle Eastern oil rises as discounts double

Refineries in India are turning to shipments from Saudi Arabia and Iraq instead of Russian oil. Sources in the Indian oil refining industry informed Reuters that these two countries have lowered their oil prices for Asian customers.

“Middle East suppliers have a lot of oil on hand and are meeting all requests for additional batches,” one of the sources said.

Due to this drop in demand, discounts for Russian oil at Baltic and Black Sea ports have doubled within a few weeks.

The discounts have now risen to as high as $19.4 per barrel. In recent weeks, discounts were at the $13-14 level, and before sanctions against Rosneft and Lukoil took effect, they were around $11.