(Bloomberg) -- A privately owned Chinese refiner bought a cargo of West African crude in a rare purchase that’s piqued traders’ interest given smaller, independent processors in China have typically tended to favor imports of sensitive, US-sanctioned grades from Iran and Russia.
Landbridge Petrochemical Co. — which recently restarted operations after a prolonged shutdown — bought 2 million barrels including Mostarda grade for January arrival, according to traders. While such plants — known as teapots — have mostly been purchasing Russia’s ESPO and Iranian oil given those cargoes tend to be cheaper and have shorter delivery routes, conditions have been shifting, making other flows more attractive, they said.
The refiner’s purchase comes as global oil market is bracing to see what changes the next Trump administration will make to its enforcement of US sanctions against Iranian oil, with banks speculating that there could be a more stringent approach. In addition, a tighter supply of spot Iranian crude — given concerns about a possible Israeli strike on Tehran’s energy infrastructure — have spurred teapots to look elsewhere, the traders said.
For Iranian oil, light crude was being offered to Chinese refiners at a $2-a-barrel discount against ICE Brent, compared with $3.50 a month ago, according to traders. For crude from eastern Russia, ESPO for January loading was offered at a premium of as much as $1.80 a barrel, up from 50 cents.
Landbridge Petrochemical did not offer a comment when contacted.
--With assistance from Serene Cheong.
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