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OIL: Russian ESPO at Premium to Brent Amid Increased Chinese Purchases

OIL
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Russia's ESPO Blend oil prices have risen to a premium over Brent for the first time since November 2023 on higher Chinese refiner demand ahead of the winter season, according to Reuters sources.

  • ESPO Blend cargoes for November loading traded at premium of $0.20-0.50/bbl delivered ex-ship to China, the sources said. Interest is boosted by relatively cheap freight for ESPO Blend oil shipments to China.
  • Lacklustre demand in China in June and July had provided opportunities for Indian refiners to increase purchases of the grade. However, ESPO Blend is now too expensive for Indian buyers and can be replaced with West Africa grades.
  • The new Yulong refinery had also purchased 5.1mbbl of Russian crude ahead of startup with a 200kbpd crude unit coming online last week.
  • Unipec, the trading arm of refiner Sinopec, purchased about 10 cargoes of ESPO Blend loading in October, a source said.
  • CNOOC has also resumed its stockpiling of ESPO Blend according to Vortexa.
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Russia's ESPO Blend oil prices have risen to a premium over Brent for the first time since November 2023 on higher Chinese refiner demand ahead of the winter season, according to Reuters sources.

  • ESPO Blend cargoes for November loading traded at premium of $0.20-0.50/bbl delivered ex-ship to China, the sources said. Interest is boosted by relatively cheap freight for ESPO Blend oil shipments to China.
  • Lacklustre demand in China in June and July had provided opportunities for Indian refiners to increase purchases of the grade. However, ESPO Blend is now too expensive for Indian buyers and can be replaced with West Africa grades.
  • The new Yulong refinery had also purchased 5.1mbbl of Russian crude ahead of startup with a 200kbpd crude unit coming online last week.
  • Unipec, the trading arm of refiner Sinopec, purchased about 10 cargoes of ESPO Blend loading in October, a source said.
  • CNOOC has also resumed its stockpiling of ESPO Blend according to Vortexa.