China benefits from sanctioned oil imports, saves billions in fuel costs 

Singapore

China's oil imports from countries under Western sanctions have inadvertently resulted in substantial savings for the nation, amounting to nearly $10 billion, according to calculations based on data from traders and shiptrackers, as reported by Reuters. 

China's savings have arisen from purchases of oil from Russia, Iran, and Venezuela, all countries subjected to sanctions by the United States and other Western nations. These savings have inadvertently lowered the cost of oil imports for Chinese refiners. 

This year, China has benefited from these lower-priced imports, boosting the country's oil throughput and refining margins. Notably, small independent operators known as "teapots" have been among the primary beneficiaries. 

China's significant imports of oil from these sanctioned countries are also providing vital revenue streams for Moscow, Tehran, and Caracas, whose economies have been adversely affected by Western sanctions and a decrease in foreign investment. 

During the first nine months of 2023, China imported a record 2.765 million barrels per day (bpd) of crude from Iran, Russia, and Venezuela. These three countries accounted for a quarter of China's oil imports during this period, significantly higher than in previous years. 

The savings resulting from these imports have been particularly advantageous for independent refiners. Reuters quoted Kang Wu, global head of demand research at S&P Global Commodity Insights, as saying that these refiners are "opportunistic buyers and actively look for bargains".   

(With inputs from Reuters) 

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