China Rushes To Buy Russian Oil As India Pulls Back

While Trump has been raging in the past month at India for buying Russian oil (then processing it and reselling it to Europe at a huge markup) and slapping it with punitive tariffs in response to repeat sanctions violations, he has generally ignored the fact that China has been importing glorious amounts of Russian oil as well: amounts which are only set to become even more glorious in coming weeks. 

And now that India is suddenly shy about funneling millions of Russian barrels with the world spotlight aimed squarely at it, Beijing is stepping up to fill the void: according to Kpler, Chinese state-owned and mega-sized private refiners are snapping up Western Russian crude cargoes for Oct. and Nov. arrival as India eases off.

Previously Bloomberg reported that in hopes to appease Trump and as they hedged their bets ahead of the Trump-Putin summit, refiners in India, the world’s top importer of seaborne Russian crude, have been scouring the globe for alternative supplies. Trump has demanded that India stop purchases of cut-price crude and doubled tariffs on the country’s goods as punishment for imports he has said were fuelling “the war machine”. The move left refiners in the world’s third-largest oil consumer looking to switch up their procurement plans.

India’s state processors have bought large volumes of non-Russian crude this week for prompt September-October delivery, extending a buying spree spurred by an early threat by Washington. Indian Oil Corp. and Bharat Petroleum Corp. have taken cargoes from all corners of the market including the US, but also Brazil and the Middle East. Just earlier today, Reuters reported that IOC bought another cargo of US WTI for delivery in October. 

These spot market purchases come on top of supplies from long-term sellers like Saudi Arabia, which is set to send about 22.5 million barrels of crude to India for September loading, traders said. India’s monthly imports from Saudi last exceeded that level in September 2024, according to data from analytics firm Kpler. 

And with India slowing, China has stepped up: as Bloomberg reports, Chinese refiners purchased about 13 cargoes of Urals and Varandey for October delivery, and at least two Urals cargoes for Nov., Kpler analyst Muyu Xu wrote in a report. The last time China took Varandey was Sept. 2023.

Following intensified Ukrainian drone attacks, which have crippled many of its refineries and lowered domestic intakes, Russia instead moved to export 10-12 more Urals cargoes. Indeed, according to BBG, refineriies at Saratov, Novokuibyshevsk, Afipskiy, and Ryazan have fully or partially halted crude intake

Still, the rise in Chinese demand for Russian oil has failed to fully offset loss of Indian demand, and Urals may be trading at $0.80/bbl premium to Dated Brent, down from $2/bbl before India scaled back buying in July. Prices are expected to fall further if India continues to eschew Russian, although with India forced to buy oil in the open market, it will likely push broader benchmark prices solidly higher in coming weeks.