China’s Teapots Likely to Import Less Sokol Crude in April, May

China’s independent refineries in the Shandong Province are estimated to import 70% less Sokol crude in April and May compared with March arrivals due to higher prices, sources told S&P Commodity Insights.

• Chinese independent refineries imported 13 cargoes of Sokol crude in March, totaling 1.26mn tons, or 298kbpd, S&P Global data showed. This was up from 295,000tons in February.
• April arrivals are likely to fall to three or four cargoes totaling 600,000 tons, trade sources said. S&P ship tracking data showed six Sokol cargoes expected to arrive in China this month.
• "There were not many offers for Sokol in the market, probably due to sanctions-related issues in shipping and payments discouraging buying interest," a source said.
• More importantly, rising prices have dampened demand for Sokol crudes, refinery sources said.
• May delivery Sokol cargoes were offered at parity to ICE Brent crude futures on a DES Shandong basis. This compares to a discount of $0.50/bbl on the same basis through March, sources said.
• China's state-owned oil companies also imported Sokol in March, with at least six cargoes discharged for PetroChina and CNOOC refineries, totaling 600,000 tons, according to S&P Global data