Saudi Arabia Retains Position as China's Major Oil Supplier

Russia remained China's second-largest crude oil supplier in 2022, trailing only Saudi Arabia, as Chinese refiners snapped up low-cost Russian barrels while Western countries avoided them following the Ukraine crisis.

China's crude oil imports from Russia increased 8% year on year in 2022 to 86.25 million tonnes, equivalent to 1.72 million barrels per day (bpd), according to data from the General Administration of Customs on Friday.

Russian crude has been trading in widening discounts to global oil benchmarks following Western sanctions over its invasion of Ukraine, which the Kremlin has called a "special operation".

China, which refused to condemn the attack, increased its purchases of Russian barrels and has largely ignored Western sanctions imposed on seaborne Russian crude beginning on December 5.

It imported 6.47 million tonnes of crude oil from Russia in December, or 1.52 million bpd, compared to 1.7 million bpd in the same period in 2021.

Since November, China's state-backed refiners have reduced their purchases of Russian oil, but independent refineries have continued to buy from intermediary traders who arrange shipping and insurance, shielding them from the risk of secondary sanctions.

According to customs data, Saudi Arabia shipped 87.49 million tonnes of crude to China in 2022, equivalent to 1.75 million bpd, the same as in 2021.

Despite weak domestic demand, China's state-owned oil refiners largely fulfilled their term contracts with Saudi Arabia in 2022.

After President Xi Jinping's December visit to Riyadh, where he told Gulf leaders that China would work to buy oil in Chinese yuan rather than US dollars, Saudi Arabia is expected to remain a key, if not the dominant, crude exporter to China.

According to customs data, Malaysian crude imports nearly doubled to 35.68 million tonnes in 2022. The Southeast Asian country serves as a transit point for sanctioned shipments from Iran and Venezuela.

Throughout 2022, no Venezuelan crude imports were recorded by Chinese customs, while 780,392 tonnes of Iranian crude oil arrived in China.

China is Iran's largest buyer of oil, but most Iranian exports are rebranded as crude from other countries in order to avoid US sanctions.

According to Vortexa, a ship tracking company, China's December imports of Iranian oil reached a record of 1.2 million bpd, up 130% from the previous year.

Crude shipments from the United States reached 7.89 million tonnes in 2022, a 31% decrease from the previous year.