Chinese refiners are making a healthy vigorish, or vig, (bettors’ slang for the bookie’s cut) taking in Russian oil, refining it, and selling the products to Europe. From Irina Slave at oilprice.com:
- China’s oil imports jumped by 2 million barrels per day in September as the country prepared to supply fuel demand growth in Europe.
- The EU has an embargo on Russian crude coming into effect in less than two months and then an embargo on fuels two months after that.
- Europe will be hoping that China’s domestic demand remains weak, as it could become a key source of oil products over winter.
Crude oil imports into Asia jumped in September. Normally such news would spark hope for demand and, consequently, prices, but this time it’s more complicated. And it has less to do with Asian demand than demand in Europe.Oil imports in Asia rose by more than 2 million barrels daily last month, Reuters’ Clyde Russell reported in his latest column, noting that the bulk went to China and Singapore.
He then went on to point out that both China and Singapore had gone through refinery maintenance in August and utilization rates were up in September. On the one hand, it’s the normal preparation for winter. On the other, the EU has an embargo on Russian crude coming into effect in less than two months and then an embargo on fuels two months after that.