OREANDA-NEWS Chinese Oil Refineries are increasingly looking towards raw materials from Africa and Brazil and are gradually reducing purchases in Russia. This is reported by Bloomberg with reference to market participants.

Brazilian oil has already been received by at least one independent Chinese refinery. The opportunity for such purchases appeared after the cost of long-distance transportation decreased, and the delivery of Russian ESPO grade oil, on the contrary, increased in price.

At the end of September, it was offered at a premium of $ 30 to Brent, after which the margin dropped to $ 20. At the same time, at the end of August, the premium did not exceed five dollars, but the worsening supply situation from the Persian Gulf and the shortage of raw materials on the market forced buyers to agree to such conditions.

Freight rates decreased after exports from the Persian Gulf countries returned to the level observed before the start of the Israeli and US operations against Iran and the closure of the Strait of Hormuz.

As of the end of October, transportation of a barrel of oil from Texas to South Korea dropped in price from $42.6 to $31, and delivery from West Africa to China from $33 to $24.5. Oil from Iraq is also offered on the market at a premium of $15 to Brent.

Earlier, Indian Oil Minister Hardeep Singh Puri confirmed a reduction in oil purchases from Russia, but explained that this was not due to US pressure, but to the return of Middle Eastern oil volumes to the market.