Russia became China's main oil supplier last year

Last year, Russia ousted Saudi Arabia as China's main oil supplier. According to data from China's customs authority, Russia delivered a record 107.02 million tonnes of oil to China, or 2.14 million barrels per day. That was far more than the next two major exporters, Saudi Arabia and Iraq. China is the world's largest oil importer and rejects Western sanctions on Russian oil.

Imports of Russian oil rose 24.1 percent year on year. Imports of oil from Saudi Arabia, by contrast, fell 1.8 percent to 85.96 million tonnes, as China opted for cheaper Russian oil. Imports of oil from Iraq rose 6.8 percent to 59.26 million tonnes.

China imported a record 563.99 million tonnes in total last year. That was equivalent to 11.28 million barrels per day, Reuters reported.

Russian oil, shunned by many international buyers after Western sanctions were imposed in 2022 over Moscow's invasion of Ukraine, traded at a substantial discount to international benchmarks for most of last year. This was due to the price cap introduced by the West. However, rising demand from Chinese and Indian refineries for discounted oil pushed up the price of Russia's ESPO crude last year, taking it above the $60-per-barrel limit set by the G7 group of leading economies, as alternative shipping and insurance options that enabled sanctions to be circumvented became more widespread.

At the same time, Saudi Arabia raised prices for its Arab Light crude from July. This prompted some refineries to seek cheaper supplies.

The oil price cap is intended to limit Russia's ability to finance the conflict in Ukraine. If the price exceeds the cap, transporting the oil and insuring its shipment are prohibited. Chinese refineries use intermediaries to arrange the transport and insurance of Russian oil to avoid violating sanctions.

Chinese oil buyers also use Malaysian waters as a transshipment hub for sanctioned cargoes from Iran and Venezuela. Imports of oil from Malaysia surged last year, rising 53.7 percent to 54.79 million tonnes.

China recorded no official oil shipments from Venezuela in December, despite the easing of US sanctions on Caracas in October following an agreement between the government of President Nicolás Maduro and the political opposition.

Shipments from the United States rose 81.1 percent last year despite geopolitical tensions between the two countries, as oil production in the US increased. China imported 14.29 million tonnes from the US last year.