Indian Refiners Scoop Up Russian ESPO Crude As China Steps Back

India bought more Russian ESPO Blend oil in April than any month since August 2024, stepping in to scoop up what weakening Chinese demand for the blend has left behind, Reuters reported on Monday, citing LSEG data. 

In April, the Reuters report shows Indian ports taking in around 400,000 metric tons of Russian ESPO, up from only 100,000 metric tons the month prior. Another 200,000 metric tons is set to ship to India in May, according to LSEG data. 

Chinese demand for Russian ESPO dipped due to sanctions on Russian companies that led Chinese state-owned refiners to cut back, in combination with seasonal refinery maintenance. 

Typically, India does not buy large volumes of ESPO because it is costlier than Russian Urals blend, and is more challenging to ship. For now, with oil prices nose-diving and Russian ESPO now selling for below the G7 price cap of $60, it’s more attractive to Indian refiners. 

Reuters cited traders as cautioning that China’s state-run giant Sinopec has restarted purchases of ESPO Blend for May, indicating that Chinese demand may be coming back. 

Chinese demand also registered a decline in terms of LNG from state-run companies, with Bloomberg reporting that China re-exported over 280,000 tons of LNG in April to date, clocking in as the highest single-month re-export volume on record. The re-export volume represents nearly 8% of total imports for April. 

Bloomberg notes that China is experiencing a mild winter and has strong inventories, and is profiting from higher prices elsewhere in re-exporting. Bloomberg noted that LNG imports are set to fall in April, as well, with declines now registered for the past five months.