China ramps up purchases of Russian oil

China snapped up three cargoes of Arctic oil, which include the highly sulfurous Arco crude. According to traders, the importer may keep on increasing purchases of such crude, shifting from business with Middle Eastern countries and Iraq's Basrah Heavy crude in particular. 

Viktor Katona, lead crude analyst at Kepler, said that global oil flows were changing. China purchased Arctic crudes that used to go to the EU. Since the Group of Seven price cap on Russian seaborne oil came into force on December 5, the amount of buyers has changed.

Traders note that Arco crude has been offered to Chinese buyers at least $10 a barrel below Brent. Brent crude futures settled at around $80 per barrel. 

China this week issued a batch of crude oil import quotas. Refiners and traders were given 112 million tonnes in import quotas in this round. The quota and recent fuel-export concession could support China’s  crude purchases and refinery run rates in the coming months.