China buys 2.15 million barrels of Russian oil per day; the reason for Moscow's "black gold" revenue decline

China, the world's largest oil importer, bought a record 107 million tonnes of crude oil from Russia in 2023, nearly 25% more than the previous year and equivalent to about 2.15 million barrels per day, according to recently released customs data.

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Crude oil samples at the Yarakta oil field, Irkutsk region, Russia. (Source: Reuters)

The figure is higher than the less than 86 million tonnes imported from Saudi Arabia. This is the first time Russia has become China's largest crude oil supplier since 2018.

Refiners in the northeast Asian nation have turned to Moscow oil for its cheaper prices and relatively short delivery route, while higher Saudi oil prices and recent disagreements with exporter Iran continue to boost demand for Russian oil.

According to Bloomberg calculations based on customs data, China's import value of Russian oil in 2023 will reach 60.6 billion USD, equivalent to an average price of about 77 USD/barrel.

Iraq and Malaysia are expected to be China's third and fourth largest crude oil suppliers in 2023, data shows.

Moscow is also the top fuel oil supplier to the world's No. 2 economy in 2023, shipping 9.6 million tonnes. Malaysia is the second-largest exporter, supplying 6.93 million tonnes.

* The International Energy Agency (IEA) said that in December 2023, Russian oil exports reached 7.8 million barrels/day, exceeding the pre-Covid-19 level and the highest since March 2023. However, revenue in December last year was only about 14.4 billion USD, the lowest level in 6 months.

According to the organization, the drop in oil prices is the reason why the country's revenue and profits from "black gold" have stagnated. Discounts have increased while prices have fallen, causing revenue to plummet but still at an "acceptable" level.

In 2023, Moscow will actively shift energy sales from the West to Asia, making full use of its old fleet to transport crude oil.

Russia has been steadily increasing its discounts to countries that buy fuel from it, such as China and India. Russia mainly supplies energy to "friendly countries".

Meanwhile, supplies to other competitors, such as the European Union (EU), fell by nearly 78%.

IEA predicts: "Moscow's crude oil export revenue will increase again when market prices go up, due to the impact of geopolitical instability in the Middle East".

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