Russia To Favour India As Crude Buyer Over China

Russia will keep selling as much oil as it can to India despite the rebound in Chinese demand according to Kpler.

• China could “buy literally the entire Russian oil exports” as it abandons Covid-zero policies, but Russia will want to keep the Indian market because it is more lucrative and gives its crude sellers greater control, said Viktor Katona, lead crude analyst at Kpler.
• Tanker journeys from Russia’s western ports to India are on average 35 days compared to 40-45 to China, further encouraging sellers to ship India.
• India around 1.85mbpd from Russia in Feb, close to its potential maximum of about 2mbpd, Katona said.
• Russia exported 2.3mbpd of crude to China in Jan, IEA data show. Chinese oil demand is estimated to grow by 900kbpd this year after travel restrictions imposed during the pandemic ended, the IEA estimates.
• Chinese refiners may want to buy more Russian crude this year, but they also have the capacity to do their own shipping. That would deprive Moscow of income from the “parallel gray fleet” of tankers it has established to is deliver crude to India, Katona said.