Sinopec Boosts Russian ESPO Crude Imports to Offset Middle East Shortages

Sinopec has increased its intake of Russian Far-East ESPO crude, covering about 5-6% of its 5.2 million bpd capacity, to make up for reduced Middle Eastern supplies amid the Iran war.

Sinopec Corp, the world’s largest refiner, has stepped up purchases of Russia’s Eastern Siberia-Pacific Ocean (ESPO) blend, securing about 30 to 40 shipments - roughly 241,000 to 320,000 barrels per day - for the July-September period, which represents 5% to 6% of its 5.2 million bpd capacity. Most of the cargoes arrived at the Rizhao port in Shandong province on Aframax vessels. The move compensates for a sharp drop in Middle Eastern crude caused by the Iran war and helps the company maintain steady throughput and strong export margins despite China’s March-August limits on overseas fuel sales.

China’s total crude imports fell 41% in June, yet the nation has eased export restrictions for July and August, prompting a shift toward Russian Far-East cargoes that offer lower freight costs and greater delivery certainty. Sinopec’s recent ESPO buys are priced $1-$2 per barrel below Brent, about $10 cheaper than comparable grades from Oman or Brazil, and are conducted via intermediaries that do not involve sanctioned Russian firms. The refiner continues to pay for Russian oil in yuan, and its imports of Saudi crude have plummeted, with zero barrels in June and July and only 2 million in August, far below pre-war levels.