Russia Emerged as China's Top Crude Oil Supplier in 2023

Russia has claimed the title of China's largest crude oil supplier, overtaking Saudi Arabia in 2023, according to recently released data. China successfully secured significant quantities of discounted oil for its processing plants. The Chinese customs data revealed that Russia shipped an unprecedented 107.02 million metric tons of crude oil to China in 2023, amounting to 2.14 million barrels per day (bpd). This substantial figure surpassed imports from Saudi Arabia, which experienced a decline of 1.8% to reach 85.96 million tons, as cheaper Russian crude gained market share.

China's demand for discounted Russian oil was driven by its refiners, along with Indian counterparts, leading to a surge in prices for Russian ESPO crude. Consequently, these prices exceeded the price cap imposed by the Group of Seven (G7). Chinese refiners resorted to using intermediary traders for shipping and insurance, ensuring compliance with Western sanctions. Furthermore, buyers strategically utilized Malaysia as a trans-shipment point for handling sanctioned cargoes from Iran and Venezuela, resulting in a remarkable increase in imports tagged as originating from Malaysia.

China's ability to secure Russia as its primary crude oil supplier showcases its resilience and determination to ensure a steady supply of oil for its growing economy. The dynamics of global crude oil trade continue to evolve, with China emerging as a prominent player in the market.