New Delhi: Over the past few months, Russia offered steep discounts on oil after India reduced its purchases because of Western sanctions over the Ukraine war and pressures from a trade deal with the United States. China recognized the opportunity and acted swiftly. Known as Teapots, Chinese refiners placed large orders to secure discounted crude. This resulted in a surge in imports that analysts predicted could double in the coming months.
Data from Vortexa Analytics indicates that Russian crude deliveries to China could reach 2.07 million barrels per day (bpd) in February, up from 1.7 million bpd in January, while Kpler Data estimates imports could hit 2.083 million bpd.
In contrast, India’s imports of Russian oil are expected to fall to 1.159 million bpd in February. This shows a big drop compared to previous months. This gap highlights the changing dynamics of global energy trade, with China capturing the advantage as India steps back.
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The discounts offered by Russia on its Urals-grade crude have been particularly favorable for China, with prices falling $9 to $11 per barrel below the ICE Brent benchmark for January and February deliveries. The extended shipments from Russia, though covering greater distance than usual, have proven more cost-effective than shorter-haul supplies previously destined for India.
Chinese refiners also view Russian crude as a safer alternative to Iranian oil, amid ongoing uncertainty about the nuclear deal and the potential for US military action against Tehran. Russian ESPO blend crude now competes directly with Iran’s light-grade oil, leading to a decline in China’s imports of Iranian crude from 1.25 million bpd in January to 1.03 million bpd in February.
The combination of heavy Russian discounts, reliable supply and strategic calculation has allowed China to cement its position as the top customer for Russian crude, while India recalibrates its purchases amid geopolitical pressures and trade commitments.
The move highlights the changing energy situation in Asia and the growing strategic partnership between Moscow and Beijing.
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