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Russian ESPO Flips to Discount to China for December as Demand Slips


Russian ESPO crude prices have slipped to a discount to Brent in Chinese ports as its demand eases and freight costs have jumped.

  • ESPO Blend loading from the Far Eastern port of Kozmino in December is trading at discounts of $0.50 to $1 per barrel to ICE Brent on a delivered ex-ship (DES) basis at Chinese ports according to Reuters sources.
  • Its down for a $1/bbl premium to ICE Brent for cargoes loading in November.
  • Freight rates for December ESPO Blend cargoes have jumped to nearly $2 million for a voyage between Kozmino and Chinese ports – up from $1.6mn in September according to SSY. It is partly being driven by higher Washington scrutiny on the Russian oil cap.
  • ESPO Blend exports are expected to rise in November and December to nearly 1 million bpd from around 900,000 bpd in September-October.

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