RoydadNaft –  Russia leapfrogged Saudi Arabia to become China’s top crude oil supplier in 2023, data showed on Saturday, as the world’s biggest crude importer defied Western sanctions to purchase vast quantities of discounted oil for its processing plants.

Russia shipped a record 107.02 million metric tons of crude oil to China last year, equivalent to 2.14 million barrels per day (bpd), the Chinese customs data showed, far more than other major oil exporters such as Saudi Arabia and Iraq.

Imports from Saudi Arabia, previously China’s largest supplier, fell 1.8% to 85.96 million tons, as the Middle East oil giant lost market share to cheaper Russian crude.

Shunned by many international buyers following Western sanctions over the Kremlin’s 2022 invasion of Ukraine, Russian crude oil traded at significant discounts to international benchmarks for much of last year amid a Western-imposed price cap.

ESPO crude shipments for December delivery were priced at a discount of around 50 cents to 20 cent per barrel to the ICE Brent benchmark, versus a $1 premium for October delivery cargoes and a discount of $8.50 for shipments delivered in March, according to trading sources.

At the same time, Saudi Arabia raised prices for its signature Arab Light from July, pushing some refiners to look for cheaper cargoes.

Chinese refiners use intermediary traders to handle the shipping and insurance of Russian crude to avoid violating the Western sanctions.

Buyers also use the waters off Malaysia as a trans-shipment point for sanctioned cargoes from Iran and Venezuela. Imports tagged as originating from Malaysia climbed 53.7% last year.

Shipments to China from the U.S. last year surged 81.1% last year despite geopolitical tensions between Beijing and Washington as U.S. crude production increased.

Here is the detailed trade breakdown, with volumes in million metric tons and on-year percentage change calculations by Reuters:

(metric ton = 7.3 barrels for crude oil conversion)