Chinese crude oil futures surged to a record high this week, with the SC crude oil futures hitting 900 yuan per barrel intraday, marking an 11.12% increase and an unprecedented level since its listing. This price hike is largely attributed to the shutdown of Saudi Arabia's East-West pipeline, which intensified the competition for oil supplies.
The supply crunch has been further exacerbated by Chinese independent refiners actively seeking spot cargoes. These refiners have been scrambling for oil, underpinning spot premiums, and several West African oil cargoes have been transacted this week. Spot premiums for cargoes delivered to China have risen by more than $10 per barrel in the last two weeks, as independent refiners increase output to meet fuel demand.
As a result, the asking price for Russian oil from its Pacific coast has also soared. ESPO crude for November-loading was offered at more than $20 a barrel above Brent futures on a delivered basis, which would represent a doubling of the premium paid just last week. Chinese refiners are increasingly turning to Russian oil as their supply options narrow, contributing to the record high prices in the Chinese crude futures market.
