China's Russian oil imports to hit new record in February as India cuts back

Core Insights - China's Russian oil imports are projected to reach a new record high in February, driven by independent refiners taking advantage of significant discounts on Russian crude as India reduces its purchases due to U.S. pressure [1][1][1] Group 1: Import Data - Russian crude shipments to China are estimated at 2.07 million barrels per day (bpd) for February, an increase from January's estimated 1.7 million bpd [1][1] - Kpler's provisional data indicates February imports at 2.083 million bpd, up from 1.718 million bpd in January [1][1] Group 2: Market Dynamics - Since November, China has become Moscow's top client for seaborne shipments, as India's imports fell to a two-year low of 1.159 million bpd in February [1][1] - The discount on Russian oil prices has reached $9 to $11 per barrel below benchmark ICE Brent for January/February deliveries to China, marking the lowest in years for Urals crude [1][1] Group 3: Competitive Landscape - Independent Chinese refiners, known as teapots, are the largest consumers of U.S.-sanctioned oil from Russia, Iran, and Venezuela, with Russian oil becoming more competitive compared to Iranian supplies [1][1] - The ESPO blend is trading at $8 to $9 per barrel discounts to ICE Brent for March deliveries, while Iranian Light is assessed at $10 to $11 below ICE Brent [1][1] Group 4: Geopolitical Factors - Uncertainty regarding potential U.S. military strikes on Iran has led to reduced buying from Chinese teapots, making Russian oil appear more reliable [1][1] - Iranian oil deliveries to China have decreased to 1.03 million bpd in February from 1.25 million bpd in January, often disguised as Malaysian oil to bypass U.S. sanctions [1][1]