China Independent Refiners Scramble for Oil, Underpinning Spot Premiums
China, the world’s largest crude importer, is the main buyer of Iranian oil and thus exposed to Middle East supply disruptions. Premiums for Russia’s ESPO Blend crude for November delivery to China have reached record highs as Chinese refiners increase purchases amid shrinking Middle Eastern and Iranian supplies. Iran’s steady oil sales to China’s independent refineries may become a casualty of Russia’s invasion of Ukraine.
Why it matters: This matters for the energy-security theme because China's reliance on Iranian and Russian crude exposes its refiners to supply shocks from overlapping conflicts.