China’s Russian Oil Imports Hit 3-Year High as Indian Refiners Pull Back
China has stepped in to absorb a massive surplus of Russian Urals crude, pushing its imports of the grade to their highest level in nearly three years. Latest shipping data and industry tracking show that Chinese arrivals of Russia’s primary export blend have surged to between 550,000 and 600,000 barrels per day (bpd), effectively filling the gap left by a cooling Indian market.
This realignment of energy flows across Asia marks a pivot in the global oil trade. For much of the past 24 months, India was the dominant buyer of the Urals grade, but a combination of tighter US sanctions, payment complexities, and narrowing discounts has caused Indian state-run refiners to scale back their purchases.
The Indian Pivot to the Middle East
The slowdown in Indian demand is largely driven by increased scrutiny of the “shadow fleet” the ageing tankers used to transport Russian oil above the G7 price cap. Indian state-owned refiners, including Indian Oil Corp (IOC) and Bharat Petroleum, have reportedly become more risk-averse, avoiding vessels recently designated by the US Treasury for sanctions violations.
Furthermore, the price advantage that once made Russian oil irresistible to New Delhi has thinned. With the discount on Urals narrowing against the global Brent benchmark, Indian refiners are increasingly returning to traditional suppliers in Iraq and Saudi Arabia, where logistics are more straightforward and payment systems are settled.
Shandong “Teapots” Scoop Up the Surplus
As Indian demand wanes, China’s independent refiners frequently referred to as “teapots” have ramped up their intake. These private refineries, concentrated mostly in the Shandong province, operate with greater flexibility than India’s state-backed giants. They are often more willing to navigate non-dollar payment systems and utilize smaller, independent shipping firms.
Data from late 2025 and early 2026 indicates that at least 20 tankers originally destined for Indian ports were diverted or resold to Chinese buyers. This influx has allowed China to stockpile Russian crude at a time when domestic refining margins are under pressure from fluctuating demand.
Logistics and the Red Sea Factor
The ongoing security crisis in the Red Sea has also played a role in the shift. While Russian-affiliated tankers generally face fewer threats of attack in the Bab el-Mandeb strait compared to Western-linked vessels, the rising costs of freight and insurance have altered the economic math.
For Russian exporters, the “long haul” to China has become more viable than navigating the increasingly complicated administrative and regulatory hurdles required to offload cargo at Indian ports on the west coast.
Comparative Import Estimates (Urals Crude)
| Region | Peak 2024 (Avg bpd) | Current Est. (Jan 2026) | Trend |
| India | 1.2 Million | 850,000 | 📉 Decreasing |
| China | 320,000 | 580,000 | 📈 Increasing |
Current Market Pricing
Urals crude is currently being delivered to Chinese ports at a discount of roughly $4 to $5 per barrel relative to ICE Brent on a delivered-at-place (DAP) basis. While this is significantly lower than the $20+ discounts seen in late 2022, the grade remains more cost-effective for Chinese refiners than many Middle Eastern or West African alternatives.
This shift underscores a broader trend of “fragmentation” in the global energy market. As India rebalances its energy security to avoid Western diplomatic friction, China is solidifying its position as the primary clearing house for Russian energy exports, gaining significant bargaining power over Moscow in the process.
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