Chinese state oil majors looking to head off supply shortages caused by the war in the Middle East have resumed seeking Russian crude cargoes after a four-month \u200bhiatus, taking advantage of a US sanctions waiver, five trade sources said. Trading arms under state-run \u200cSinopec and PetroChina have this week made inquiries with suppliers for possible purchases of Russian oil, which would be their first since November, said five sources close to or involved in Russian oil trade. While no deals were known to have \u200bbeen struck as of Tuesday, two of the sources said transactions were likely to be imminent \u200bas Russian oil remains cheap versus rival supplies from Brazil and West Africa despite surging \u2060prices and premiums triggered by the US-Israel war on Iran that began on February 28. Chinese oil majors \u200bwere \u201cassessing\u201d the situation, said a state oil trader, including whether payment and delivery could be completed within the \u200b30-day waiver window that began on March 12 and applies to cargoes that had already been loaded. Sinopec and PetroChina did not immediately respond to requests for comment. One of the sources, involved in Russian oil trading and familiar with PetroChina\u2019s trading operations, said \u200bmajors could also seek to secure cargoes while the situation is \u201cmessy\u201d by buying from Chinese independent refiners or \u200btraders with Russian-origin oil already in storage. \u201cSome teapots are ready to resell, as that makes more money for them than \u200cprocessing \u2060at their plants,\u201d said the source, referring to the independent refiners. End-April arriving ESPO blend, Russia\u2019s flagship Far East export grade, was last heard offered by a Russian producer at $8 a barrel above July ICE Brent on a delivered basis. That compared with April-loading Brazil\u2019s Tupi grade last pegged at a premium of $12-15 over dated Brent. FROM \u200bDISCOUNT TO PREMIUM Differentials for \u200bESPO, mostly consumed by \u2060China\u2019s independent refiners, flipped into a $2-$3 premium last week for April\/May shipments, compared with discounts of $7-$10 for March-loading barrels. China\u2019s seaborne Russian oil imports surged to an all-time high \u200bof 1.92 million barrels per day in February, Kpler data showed, as independent \u200bbuyers snapped \u2060up deeply discounted cargoes after top buyer India\u2019s demand fell. State oil companies had since late October suspended buying Russian oil after Washington imposed sanctions on Moscow\u2019s two biggest oil companies, Rosneft and Lukoil. The spikes in spot premiums and outright \u2060Brent prices \u200bto more than $100 a barrel would, however, sideline independent refiners, said \u200bthree of the sources, as they are cushioned for the near term with cheaper inventories of Russian and Iranian oil bought before \u200bthe war.<\/p>\n","protected":false},"excerpt":{"rendered":"
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