Reuters, citing people familiar with the matter, reported that Chinese refiners continue to buy ESPO blend crude oil from Russia’s Far East Kozmino port and pay them via wire transfer.

A wire transfer is similar to a cash advance and requires the buyer to transfer funds to the seller in advance.

However, each Aframax tanker-sized cargo now costs more than 85 million dollars, which is not easy for Chinese buyers with limited funds to purchase.

Sources also revealed that due to the sanctions on Russia, its exporters cannot obtain letters of credit from banks, so some Russian sellers are also offering buyers open credit, but this also increases their risk exposure.

In addition, Reuters quoted two informed trading executives as saying that the cash settlements still need to go through the SWIFT system to Russian banks that are not on the US sanctions list.
According to the International Energy Agency, Russia is the second-largest crude exporter globally, with exports of 7.8 million barrels per day in December last year.

Reuters cited tanker tracker Vortexa Analytics reporting that China imported 575,000 barrels of ESPO per day via tankers last year, accounting for 6% of total Chinese crude oil imports.

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