China saves billions by record import of sanctioned oil
China has reaped savings of nearly $10 billion this year through record purchases of oil from countries under Western sanctions, according to Reuters’ calculations based on data from traders and ship trackers.
An unintended consequence of sanctions imposed by the United States and others on Russia, Iran, and Venezuela has been the reduction in oil import costs for refiners in top economic rival China, which often criticizes such “unilateral” penalties.
Reuters’ analysis of China’s savings on oil purchases from the three sanctioned countries compares the released figures to what Chinese importers would have paid by purchasing similar grades from non-sanctioned producers.
The lower-priced imports have been a boon as it bolsters throughput and margins for the world’s second-largest oil consumer and refiner, especially its small independent operators known as “teapots”, and facilitates lucrative exports by state-owned refiners of diesel and gasoline.
China shipped in a record 2.765 million barrels per day of crude by sea from Iran, Russia, and Venezuela in the first nine months of 2023, according to an average of data provided by tanker trackers Vortexa and Kpler.
The three countries accounted for a quarter of China’s imports between January and September, up from about 21% in 2022 and double the 12% share in 2020.