Premiums for ESPO Blend crude oil loading from Russia’s Kozmino port in late August to early September for delivery into China have held firm as buyers seeking to meet robust demand ignore the threat of increased U.S. tariffs, four traders said on Wednesday.

Trump on Monday shortened a deadline for Moscow to make progress toward a Ukraine peace deal or face secondary tariffs of 100% in 10 to 12 days.

This set the deadline for Russia at August 7 to August 9, while ESPO cargoes loading in September are being traded.

Traders said Russian oil trade continued as usual.

ESPO Blend’s premium to international benchmark ICE Brent was at $2-2.20 per barrel for cargoes loading at end-August and early September as increased refining margins boosted Chinese buying interest, they added.

They said independent refiners in the eastern Shandong province have slightly increased their crude processing rates as margins have improved. State oil majors also operated at higher rates this month.

The traders, who could not be identified because they were not authorised to speak publicly, said ESPO is considered the most economical crude for Chinese refiners as Middle East crude prices have strengthened.

Unipec, the trading arm of Chinese state-run Sinopec, bought 7-8 cargoes of August-loading ESPO, trade sources said last week, which they said was an increase without giving numbers for previous months.

Sinopec did not immediately respond to a Reuters’ request for comment.

Shandong Yulong Petrochemical has also made a rare purchase of Russia’s Urals crude, traders said last week.

A decline in exports of Russian Sokol crude produced at Sakhalin Island in August due to maintenance at the oilfield has also supported ESPO prices, traders said. Most Sokol crude is exported to China with the rest going to India, data from analytics firm Kpler showed.
Source: Reuters