Page 10 - AsianOil Week 22 2022

AsianOil EAST ASIA AsianOil

China hiring more tankers

to transport Russian crude

PIPELINES & CHINA International United Petroleum & crude is thought to be made up of Russia’s heavy
TRANSPORT Chemical Co. (Unipec), the largest trading sour Urals crude, accounting for 15% of the total
company in China, has hired around 10 crude Urals demand worldwide. As a result, total esti-
oil tankers in the firm’s bid to maintain the flow mates currently place China’s Russia-sourced
of discounted Russian crude into the country. imported crude as approaching 2mn bpd.
Unipec is a subsidiary of China’s oil and gas And with Western countries continuing to
giant Sinopec, and the increase in tanker hire sanction Moscow, the profits could extend into
has seen it expand its fleet five-fold, according to the summer for Asian countries still intent on
shipping analytics firm Vortexa. importing Russian crude.
The tankers being hired are made up primar- Urals in particular has been hard hit by UK
ily of smaller Aframax vessels. Each is capable and US-led sanctions banning Russian crude
of carrying 80,000-120,000 tonnes of crude, or imports. The European Union also agreed to a
586,000-880,000 barrels, and these vessels are a partial ban on Russian oil this week.
common sight at Chinese ports in the East China It is in India and China, however, that Russia
Sea. stands to gain, with Urals currently selling for
Two larger supertankers are also known to just $87 per barrel. This is significantly lower The tankers being
have been contracted by Unipec. Parent com- than current prices for the other benchmark
pany Sinopec remains tight-lipped on the exact crudes traded globally; Brent and West Texas hired are made
details, loads and routes being taken by each Intermediate (WTI) have both risen above $115
of the hires. However, one of the supertankers per barrel in recent days. up primarily of
though is known to be the Yuan Qiu Hu, which Just last week 74-79mn barrels of Russian
was involved in a rare ship-to-ship crude transfer crude were shipped to Asia. The bulk of this smaller Aframax
off the coast of South Korea in late May. made its way to Indian and Chinese ports. vessels.
Russian Urals crude is typically shipped to This number is almost triple the 27mn barrels
Chinese ports in five days by sea. shipped in the week prior to Russia’s February
As end destinations of the 10 new tankers 24 invasion of Ukraine.
remains unknown currently, though, there is This rush to snap up discounted Russian
increasing speculation in Asia as to whether crude may not be without consequence, though,
these cargoes are set for Southeast Asian ports at least for India.
to help Beijing garner influence in related trade “Some of the interested buyers in Asia are
issues. more motivated by economics rather than tak-
According to recent reports from Beijing, it ing a political stand,” a Kpler Singapore senior
is now understood that China is importing just oil analyst, Jane Xie, was quoted by media as say-
over 1mn barrels per day (bpd) of crude into the ing. “That said, there has been an increase in US
country using sea routes. Some indicators point interest in India’s buying of Russian oil, so there
to the number being closer to 1.1mn bpd. may be some downside risks to this trade flow,
A further 800,000 bpd is also moved across even if it is currently unlikely to be dented sig-
Russia to Chinese refineries via pipeline. This nificantly,” she added.™

P10 www. NEWSBASE .com Week 22 03•June•2022