After Saudi Arabia, Russia was China’s second-largest source of crude oil in 2022. This happened because Chinese refiners bought cheap barrels from Russia when Western countries avoided them because of the Ukraine conflict.
According to figures released by the General Administration of Customs, China’s crude oil imports from Russia increased 8% in 2022 over the previous year to 86.25 million tonnes, or 1.72 million barrels per day (BPD).
As a result of Western sanctions for its invasion of Ukraine, Russian crude has been trading with increasingly more significant discounts to international oil benchmarks.
China increased its purchases of Russian barrels and disregarded the sanctions imposed by the United States-led Western bloc, which started on December 5, 2022 onwards. As a result, in comparison to 1.7 million BPD during the same month in 2021, it imported 6.47 million tonnes of crude oil from Russia in December, or 1.52 million BPD.
Since November 2022, China’s state-backed refiners have reduced their purchases of Russian oil. Still, independent refineries have continued to buy from intermediaries handling shipping and insurance, thus protecting them from the possibility of additional penalties.
According to customs data, Saudi Arabia transported 1.75 million BPD, or 87.49 million tonnes, of crude to China in 2022, matching its 2021 output.
Despite the weak domestic demand, China’s state-backed oil refiners generally completed their term contracts with Saudi in 2022. During his Riyadh visit in December, President Xi Jinping informed the Gulf leaders that Beijing would strive to buy oil in Chinese yuan rather than U.S. dollars. Since then, Saudi Arabia has continued to be an important, if not the leading, petroleum exporter to China.
According to customs data, Malaysia’s crude imports nearly doubled to 35.68 million tonnes in 2022. In addition, the nation in Southeast Asia serves as a hub for the transit of restricted goods from Iran and Venezuela.
Chinese customs didn’t record any imports of Venezuelan crude during the entire year of 2022, although 780,392 tonnes of Iranian crude oil did.
China is Iran’s largest oil customer, but to get over American sanctions, most Iranian supplies are repackaged as petroleum from other nations. According to Vortexa, a ship tracking expert, China’s imports of Iranian oil reached a record high of 1.2 million BPD in December 2022, up 130% from a year earlier.
In 2022, the United States shipped 7.89 million tonnes of crude, a 31% decrease from 2021.