June 23, 2024
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Asia and Africa Oil Imports Jump to Record High on Cheap Russian Crude

Asia and Africa, which replaced Europe as the primary destinations of Russian crude oil, rushed last year to import cheaper crudes from Russia, boosting Asian and African overall crude oil imports to record highs.

After the EU and G7 embargoes and sanctions came into effect, Russia managed last year to divert most of its crude exports away from Europe and onto Asia and Africa, according to OilPrice.com.

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While Russian crude exports to Europe crashed in 2023, Russia’s shipments to Asia surged by 56% on the year, and soared by 144% to Africa, per Kpler data reported by Reuters columnist Gavin Maguire.

Asia is now the key outlet for Russian crude, with China and India taking most of the Russian oil cargoes. But many countries in Africa also imported Russian crude – at steep discounts – and those include Ghana, Libya, Tunisia, Togo, Egypt, Libya, Morocco, Senegal, and even Nigeria, OPEC’s largest oil producer in Africa.

The discounts of the Russian crude grades relative to international benchmarks incentivized a lot of purchases from both Africa and Asia. Russia’s flagship crude grade, Urals, has been trading at a discount of around $20 per barrel to Dated Brent for most of last year.

Thanks to its lower-priced crude, Russia became China’s largest oil supplier last year, selling a record 107.02 million tons of crude, according to Chinese customs data. The total amount equalled a daily import rate of 2.14 million barrels, far ahead of Saudi Arabia, whose oil exports to China slipped to an average of about 1.7 million barrels per day (bpd) in 2023, the data showed.

India was the other country that saw Russia turn into its largest oil supplier last year, while the share of Europe in Russian oil imports dropped from around 45% to about 4-5%.

Together, China and India took in some 90% of Russia’s oil exports in 2023.

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