By January 23, 2017 0 Comments Read More →

Russia beats Saudi Arabia as China’s top crude oil supplier in 2016


Chinese teapot refineries increased Russian oil imports in 2016 because they saw Russia as a more flexible supplier. Getty Images photo by Guang Niu.

Russia 2016 supplies up 24 per cent over 2015

By Chen Aizhu and Meng Meng

BEIJING, Jan 23 (Reuters) – Russia overtook Saudi Arabia in 2016 to became China’s biggest crude oil supplier for the first year ever, customs data showed on Monday, boosted by robust demand from independent Chinese “teapot” refineries.

Russian shipments surged nearly a quarter over 2015 to about 1.05 million barrels per day (b/d), the data showed, with Saudi Arabia coming in a close second with 1.02 million b/d, up 0.9 per cent in 2016 versus the previous year. China is the world’s second-largest oil buyer and the fastest-growing major importer.

While Saudi Arabia counts China’s state oil firms as backbone clients through long-term supply contracts, China’s independent refineries – nicknamed “teapots” due to their smaller processing capacity – saw Russia as a more flexible supplier.

For the teapot plants, authorised to import crude oil for the first time in late 2015, shipments from Russia’s eastern ports are easier to process, coming in smaller cargo sizes at a closer proximity.

Russia may be able to maintain the top spot in 2017 as it expands exports of its East Siberian-Pacific Ocean (ESPO) pipeline blend crude. Saudi Arabia, meanwhile, is set to shoulder the lion’s share of supply cuts agreed to last year by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers.

“OPEC cuts means Gulf producers take a hit in terms of market share, even though most of their cuts are to Europe and US …Russia has an ESPO expansion coming up as well as supplies via Kazakhstan earmarked for China,” said Michal Meidan of consultancy Energy Aspects.

State-run Saudi Aramco is expected to look to a new refinery under state-run CNOOC to lift sales.

For December, Russia also held the top spot with supplies up 4.8 per cent from the same month a year earlier at 1.19 million b/d. Meanwhile Saudi sales dropped nearly 20 per cent from a year earlier to 841,820 b/d, data from the Chinese General Administration of Customs showed.

Total crude oil imports in December hit a record as refiners stepped up purchases ahead of a deal by oil-producing countries to reduce supply and bolster prices.

For the whole of 2016, imports gained nearly 910,000 b/d over 2015, the strongest annual growth on record and mostly driven by teapot buying.

Third-largest supplier Angola shipped 13 per cent more crude last year versus 2015, while No. 4 seller Iraq recorded similar growth.

China also boosted imports from South American producers last year, with growth of 37.6 per cent from Brazil and 26 per cent from Venezuela, the data showed.

Imports from Iran expanded nearly 18 per cent last year to a record 624,260 b/d, as Chinese state oil firms started to lift barrels from their investments in Iranian oilfields in addition to term supply agreements.

(Reporting by Chen Aizhu and Meng Meng; Editing by Kenneth Maxwell and Christian Schmollinger)

energy transition

Ph: 432-978-5096 Website:

Posted in: News

Post a Comment