There is a lot of conflicting information in the Russian, European and American media about oil purchase prices in China in the first quarter of 2022, a significant discount on Russian oil is reported and allegedly that the purchase price for Russian oil for China is the lowest of all possible prices for oil, but information in the Chinese media does not confirm this opinion.
Oil plays an important role in both the military industry and civilian industry, oil is an important resource for the development of China's industry, and the analysis of information in the Chinese media gives the following picture:
1. The average price of imported oil from Iran is the lowest for China.
In the first quarter of 2022, China's highest oil import price was 4,316 yuan/t from Norway, and the lowest was 3,330 yuan/t from Iran. We see that the export price of oil between the two countries differs by 986 yuan/ton.
We see that the price of oil imported from Iran is very low, but from a numerical point of view, China imported less than 260,000 tons of oil from Iran in the first quarter of 2022, which is a very low value. Why are over 200,000 tons imported when the price is so low?
Even though Iran provides the largest discount on its oil, Iran is no longer China's main source of oil imports. What is the reason?
Under the dual influence of the epidemic and the war, Iran's current oil production is still relatively low. The produced oil must not only be used in its own country, but also exported to the European Union, India and other regions, which has led to a shortage of supplies from Iran. In other words, although the price of Iranian oil exports is low, the amount of oil Iran can supply to China is small. Therefore, China mainly imports oil from the US, Russia and the Middle East.
2. What is the volume of oil imports to China from the US?
By mid-April, exports of crude oil and petroleum products from the United States rose to 10.6 million barrels per day, according to the US Energy Information Administration. In the first quarter of 2022, China's total oil imports from the United States reached 2.5204 million tons, and the average import price reached 4,075 yuan per ton.
3. Did Russia supply more oil to China than other countries?
Data for the first quarter of 2022 shows that the amount of oil purchased by China from Russia in the first quarter was 19.0548 million tons, the payment amount was 77.079 billion yuan, and the average price was 4045 yuan per ton, ranking second in the list of suppliers for China.
After the international situation changed this year, the US initiated restrictions on Russia, including on oil. However, there are still many countries that do not follow US advice and instead step up their efforts to buy Russian oil.
Thus, the price of oil from Russia to China is slightly lower than the price of oil from the US to China, and Russia does not discount its oil as much as Iran does. According to Chinese journalists, it makes no sense for China to transfer all oil supplies to one large supplier. China now imports a large amount of oil and is not dependent on any one country, so there is currently no risk and a sufficient and reliable supply of oil can be obtained. From the current point of view, only the price is constantly fluctuating, which will also introduce a lot of uncertainty in the development of the oil industry.
In terms of the structure of imports, China has completely dispersed the sources of oil imports so that no major oil supplier can dictate its terms, in general, the largest volume of oil imports to China come from the Middle East, followed by Russia.