Chinese Refiners Drive ESPO Crude Premiums to Record Highs

The East Siberia-Pacific Ocean (ESPO) grade has become a critical lifeline for China, which absorbed 83% of the blend's exports during the first seven months of the year. While this dominance slipped slightly from the 88% recorded in the same period last year, the sheer velocity of the trade keeps demand high. Cargoes loaded at the Kozmino port reach Chinese refineries in under a week, a logistical advantage that outweighs the ballooning price tags.

Competition for these barrels remains fierce, particularly from India. Indian refiners, traditionally loyal to the Urals blend, have increased their stake in ESPO exports from 12% to 16%. Although Indian buyers face longer transit times and higher costs compared to Urals, the blend serves as a vital strategic backup during supply disruptions in the Middle East. Recent data indicates that India’s intake may be cooling, however, as Ukrainian strikes on Russian energy infrastructure and aggressive bidding from Chinese firms tighten the availability of Moscow’s output.