As we all know, Russia has begun selling discounted oil since being sanctioned by European and American countries. Among them, India buys the most and can now import almost 1.2 million barrels of crude oil every day. After all, compared with Brent crude oil which is about US$120 per barrel, Russian crude oil is US$30 to US$35 cheaper. Many people will ask, since Russian crude oil is so cheap, why doesn’t our country import a large amount of it? In fact, China had signed an oil contract with Russia before this, and it imported a lot of oil every year.
On the basis of the original contract, China’s crude oil imports from Russia have also increased this year. Data shows that in May alone, China imported 8.42 million tons of crude oil from Russia, an increase of 55% over the same period last year. At the same time, Russia has also replaced Saudi Arabia after a lapse of 19 months, becoming my country's largest crude oil supplier.
But for other crude oil suppliers, this is not good news. Under the influence of the epidemic, striving for market share in China has become even more important, especially for Middle Eastern countries that rely on oil exports. As a major oil exporter, Iran has previously been restricted in crude oil transportation due to US sanctions. Faced with the Chinese market that is constantly being "cannibalized" by Russia, Iran is considering lowering its already cheap crude oil prices to obtain stronger Competitiveness.
Officially disclosed data shows that China's crude oil imports from Iran declined in April this year. htmlAlthough imports rebounded in May and June, they were only about 700,000 barrels per day. To some extent, Russian Urals crude has replaced some Iranian crude.
In fact, from a global perspective, Iran’s crude oil prices are quite cheap, nearly 10 US dollars lower than the Brent crude oil futures price, and even similar to
html Russian crude oil that arrived in China in August. However, ESPO crude oil from Kozmino, Russia, has lower sulfur content, higher quality, and is discounted, so our country is importing more from Russia these days.
Source: Bloomberg
It's not just Iran, West African suppliers are also under great pressure, such as Angola , Gabon and Republic of the Congo . Compared with Iran, these areas are further away from China and cost more in transportation. Therefore, the price of crude oil is also higher and the competitive advantage is smaller.
Now Iran has considered further lowering the price of crude oil on the original basis. It will certainly benefit China, as it can buy more cheaper crude oil and stabilize domestic oil prices. However, our country has never put its eggs in the same basket, so it will not significantly reduce its crude oil imports from these countries. When my country's economic activities are fully restored, demand for all crude oil will increase.
