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China disregards price caps and purchases Russian oil at multi-month low discounts

China disregards price caps and purchases Russian oil at multi-month low discounts.

 

Amid sluggish demand and low refining margins, China is paying the biggest discounts in months for Russian ESPO crude oil, even if the actual amounts refiners pay may be higher than the price cap that Western nations set this week.

 

The Group of Seven (G7) nations, the European Union, and Australia imposed a $60 per barrel cap that went into effect on Monday in an effort to curtail Moscow’s ability to fund its conflict in Ukraine, though Russia has promised to challenge it.

 

China, the largest oil consumer in Russia, has rejected the price cap. Traders claimed that business was going as usual.

 

The majority of ESPO exports from the Russian Far Eastern port of Kozmino go to China’s independent refiners, who are protected from potential secondary sanctions from the price cap by securing the supplies almost exclusively on a delivered basis from merchants who handle shipping and insurance.

China, the largest oil consumer in Russia, has rejected the price cap. Traders claimed that business was going as usual.

 

The majority of ESPO exports from the Russian Far Eastern port of Kozmino go to China’s independent refiners, who are protected from potential secondary sanctions from the price cap by securing the supplies almost exclusively on a delivered basis from merchants who handle shipping and insurance.

 

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