Russian ESPO Blend oil exports to China via the Skovorodino-Mohe pipeline are expected to jump by 57 percent to 6.7 million tonnes in the first quarter of 2018 compared with the previous three months, sources familiar with the loading schedule told Reuters.
Russia has become China’s top supplier of oil with total deliveries exceeding 1 million barrels per day as part of its policy to boost ties with the Asia-Pacific amid a political stand-off with the West.
Earlier this week, Urals crude differentials in northwest Europe rose to the highest level since August 2013 in response to concerns over supplies of the grade for loading in January because of Russian plans to boost overland oil exports to China in 2018.
Russia will supply 28.3 million tonnes of oil to China via the Skovorodino-Mohe pipeline in 2018 as part of an inter-governmental agreement, up from 16.5 million tonnes seen for 2017.
Sources said that Urals and Siberian Light oil exports from the Black Sea port of Novorossiisk are seen unchanged, at 8.5 million tonnes in January-March.
Exports and transit of Urals oil from the Baltic Sea ports are seen declining to 19.1 million tonnes in the first quarter from 19.6 million tonnes in October-December, according to the sources.
They also said that Russian companies will likely further trim their seaborne Urals exports as Moscow has agreed to extend its oil production cuts until the end of 2018 as part of a global deal.
“I do not believe that the westward schedule will be fully completed,” a trader said.
Source: Port News