If Russia loses Western markets for its oil I’m sure China will be only too happy to replace it…
www.spglobal.com/commodity-insights/en/market-insights/lates…
Crude oil from Far East Russia, usually a staple for North Asian refiners, is facing a dearth of buyers this month as mounting sanctions against Russia make the trade fraught with risk…“Refineries across Northeast Asia, including China, have been cutting run rates amid lower supply of Russian crudes and limited replacement crude alternatives,” a trader with a Japanese trading house said…
Chinese independent refineries, end-users of ESPO cargoes, usually have to open a letter of credit with a banks in order to make the payment…But no banks are currently willing to provide L/Cs for Russian-related commodities to independent refineries, which instead have turned to telegraphic transfers or T/Ts to fulfill contracts, which is as good as paying in cash, according to sources…Some sellers of Russian cargoes are now said to be offering on a direct payment rather than L/C basis, but there are few takers…
Support from China was being seen as crucial for stressed Russian sellers, but has failed to take off due to the lack of clarity among buyers and payment hassles, sources said. “Honestly, I think SOEs [China’s state-owned enterprises] might not be in a hurry to touch Russian crude without a clear vision against this Ukraine-Russian situation,” a trader with a North Asian refinery said.
DB2