China is buying record volumes of cheap Russian oil

China's crude oil imports in November increased by 4.88% compared to the same period last year and reached their highest daily level in two years, reports Reuters. The main reason was a sharp drop in prices for Russian and Iranian oil due to sanctions, which allowed Chinese refiners to significantly increase their margins while increasing purchases.

In November, China imported 50.89 million metric tons of oil, equivalent to 12.38 million barrels per day. This is 5.24% more than in October and the highest figure since August 2023.

In the first eleven months of the year, the world's largest crude oil importer purchased 521.87 million tons, which is 3.2% more than in the same period last year.

"Domestic demand has seen a seasonal decline, but sanctions on crude oil supplies from Iran and Russia have led to a significant drop in raw material prices, which has increased refining margins and prompted more refineries to apply for preliminary import quotas ahead of the first batch in 2026," explained Emma Li, a leading analyst of the Chinese market at Vortexa.

Record discounts on Russian and Iranian oil have changed China's procurement structure. Iranian oil supplies increased by 233,000 barrels per day compared to October, reaching 1.35 million barrels per day in November. This is the highest figure since August, according to the analytical company Kpler.

"This was partly due to Iran's high export volumes in previous months, and partly because buyers likely anticipated an early allocation of November crude oil quotas, prompting them to lock in supplies in advance," said Muyi Xu, a senior analyst at Kpler.

At the same time, the volume of Russian crude oil supplies by sea in November decreased slightly – by 157,000 barrels per day compared to the previous month, to 1.19 million barrels per day.

• Chinese oil refiner Yanchang Petroleum, which previously regularly imported Russian oil, put its procurement on hold after the US sanctions against Rosneft and Lukoil.
• Reuters also reported that major companies such as [company name] have started to avoid purchasing Russian oil after the sanctions PetroChina, Sinopec, CNOOC, and Zhenhua Oil.