Already, at least one independent refinery in China has received a cargo of Brazilian crude oil
Chinese refineries are increasingly turning toward purchasing oil from Africa and Brazil, while simultaneously curbing their supplies from Russia, according to a report by Bloomberg citing market sources. Already, at least one independent refinery in China has received a cargo of Brazilian crude oil. The shift toward alternative suppliers became feasible following a decline in long-distance freight costs, precisely as prices for Russian ESPO grade crude recorded an increase, impacting global oil trade.
At the end of September, this specific Russian oil was offered at a premium of 30 dollars per barrel over Brent, before the price differential narrowed to 20 dollars. At the end of August, the premium did not exceed 5 dollars. However, deteriorating supply conditions from the Persian Gulf and limited crude availability on the market forced buyers to accept higher prices, reshaping crude oil pricing.
The easing of freight rates came after Persian Gulf oil exports returned to levels recorded prior to the Israeli-American operation against Iran and the subsequent closure of the Strait of Hormuz. By late October, the cost of transporting a barrel of oil from Texas to South Korea had fallen from 42.60 dollars to 31 dollars. Correspondingly, the freight rate for shipping oil from West Africa to China dropped from 33 dollars to 24.50 dollars. At the same time, Iraqi crude is offered at a premium of 15 dollars per barrel relative to Brent, influencing maritime freight costs.
Earlier, India's Minister of Petroleum, Hardeep Singh Puri, confirmed that the country is reducing purchases of Russian oil. However, he attributed this development not to US pressure, but primarily to the return of sufficient volumes of oil from the Middle East to the international market, altering energy market dynamics.
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