Chinese refiners have purchased all crude oil cargoes set to load from Russia’s Far East port of Kozmino in August weeks earlier than usual, as risks to Middle Eastern supply spiked this week with attacks on tankers in the Red Sea.
China has been snapping up the cargoes at a faster pace, which raised the price of the Russian Far Eastern crude blend ESPO to a discount of just $1 per barrel to the price of ICE Brent, up from a discount of between $3 and $4 per barrel two weeks ago.
Two weeks ago, risks to crude oil supply from the Middle East rose again after the ceasefire was shattered by Iranian attacks on vessels in the Strait of Hormuz.
This week, Brent crude oil prices hit $100 per barrel again, as the Strait of Hormuz remains almost entirely paralyzed and the Iran-aligned Houthis in Yemen target tankers in the Bab el-Mandeb Strait.
As a result, Chinese buyers are wasting no time securing some alternatives to Middle Eastern supply well in advance.
