China increased imports of Russian crude by more than 30% in March compared to a year earlier, while decreasing Saudi imports of the commodity, Reuters reported citing Chinese customs data.
China has been boosting oil exports in a move seen as taking advantage of record low prices, which sank amid crumbling demand and global lack of storage space. The coronavirus pandemic has nevertheless severely cut the demand of one of the top global importers, but in March China purchased a total of 9.68 million barrels per day (bpd), 4.5% than it did during the same period in 2019.
Russia and Saudi Arabia supplied almost equal amounts of oil to the country last month, with shipments standing at 7.02 million tonnes (1.66 million bpd) and 7.21 million tonnes (1.7 million bpd) respectively. However, the data released by the General Administration of Customs show that purchases from Riyadh fell 1.6 percent, while Russian crude imports rose 31 percent, according to Reuters calculations.
The increased imports come as the Chinese economy is slowly getting back to normal, with most enterprises resuming operations after weeks-long quarantine. China became the first country to be hit by the deadly virus at the end of last year. Since then the outbreak shifted from Asia to Europe and the U.S., which has become the new epicenter of the epidemic. As of Sunday, over 939,000 people were infected in the U.S., while 53,934 were killed by the virus, according to Johns Hopkins University data.
The pandemic has sapped global demand for crude which might fall by around 30 percent, according to some gruesome estimates. As both onshore and offshore storage facilities have been running out of space, oil prices tumbled to record lows earlier this week, with WTI futures for May delivery entering negative territory. Prices for the international benchmark Brent also fell to multi-year lows.
In a bid to help the market rebound, the Organization of the Petroleum Exporting Countries (OPEC), as well as allied producers led by Russia, agreed on historic output cuts earlier this month. Starting in May, the signatories will have to slash production by 9.7 million barrels per day. However, many fear that the cuts came too late and will be not enough to ramp up the prices as demand will not rebound any time soon.