India boosts buying of Russia's ESPO oil in April as Chinese demand eases

MOSCOW (Reuters) -India increased purchases of ESPO Blend oil from Russia in April to the highest level since August 2024 amid weaker demand from Chinese companies, according to LSEG and traders' data.

ESPO Blend is Russia's flagship light crude oil grade loading from Kozmino port to Asian markets and most favoured by Chinese refiners.

In March and April, Chinese state refiners cut purchases of ESPO Blend oil amid sanctions on Russian companies and seasonal maintenance, making more barrels available to the second major buyer of Russian oil - India.

Russian ESPO Blend oil supplies to Indian ports have risen to some 400,000 metric tons (or about 100,000 barrels per day) this month compared to just one cargo of 100,000 tons in March, according to LSEG and traders' data.

That is the largest volume of ESPO Blend oil purchased by India since August last year, Reuters data shows.

"Recently traders have started showing us ESPO volumes as well. Seems there is low demand in China for ESPO", said one of sources in India's oil industry.

India, the largest buyer of Russian oil by sea, purchases small amounts of ESPO Blend as complicated logistics and a higher price compared to Russia's Urals oil normally make the grade less attractive for Indian refiners.

India is set to receive another 200,000 metric tons of ESPO Blend in May, according to LSEG. Traders say it is possible that India's ESPO Blend imports next month will rise amid higher availability of the grade and ongoing soft demand for the crude in China.

Also, weak international benchmark prices have pushed the cost of Russian oil including ESPO Blend below the Western price cap of $60 per barrel, which may allow the grade to be bought more easily.

However, China's Sinopec has resumed buying ESPO Blend for May, which may affect India's buying prospects.

(Reporting by Reuters in Moscow and Nidhi Verma in New Delhi. Editing by Mark Potter)