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China buys Russian oil above price cap – Bloomberg — RT Business News

Crude trading above the $60 limit set by Western countries could mean Moscow covers transportation and insurance costs

Russian ESPO crude from the Far East is selling above the $60 a barrel price cap imposed by the West in Asia, Bloomberg reported on Friday, concluding that Moscow could use its own tankers and insurance to circumvent punishments.

The ESPO grade export price for January deliveries was estimated at $67.11 by independent pricing information provider Argus Media on Thursday, and a number of Chinese independent refiners who have already booked shipments oil for that month.

A price cap on Russian oil exports by sea at $60 a barrel was introduced by the EU, G7 countries and Australia on December 5. It prohibits Western companies from providing insurance and other services to Russian oil shipments unless the cargo is purchased at or below. the fixed price.

Traders familiar with the matter told Bloomberg that ESPO crude sales above the price cap could mean Russia is providing tankers itself and insurance for shipments that can be delivered from the Far East. East to China in days.

China, Russia’s top oil buyer, did not sign the price cap, with traders saying they are doing business as usual.

Independent refiners are the main customers of ESPO grade and “don’t really care about price caps. All they do is crunch the numbers to see if the delivered prices are making a good profit or not,” an unnamed independent refinery sales executive told Reuters earlier this week.

At least one ESPO shipment that arrived in December was sold to an independent refiner at a discount of $6 a barrel from February’s ICE Brent price based on ex-ship delivery (DES), Reuters reported, citing traders familiar with the agreement. At the current Brent crude price, that means the ESPO cargo was sold at around $68 a barrel.

In October, media reported that Russian oil giant Rosneft was expanding its tanker charter business, with the aim of helping customers in non-sanctioned regions receive oil supplies without delay after the entry in force of the EU embargo. Reports indicate that customers were asking Rosneft to ensure delivery to the final destination and to cover insurance and freight costs.

Russia has repeatedly said it will not sell oil to countries that support price caps.

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