The BRICS business group addressed domestic oil drama this week, with Iran demanding higher prices and withholding oil shipments from China, and India cutting back on bulk purchases of Russian crude after Russia stopped selling its oil on fire. did.
The original members of BRICS were Brazil, Russia, India, and China. South Africa joined in 2010 and was joined by six additional members. Added The remarks at the August 2023 summit upset U.S. policymakers concerned about the China-dominated bloc's growing influence. One of them, Argentina, declined the invitation to join, bringing the current number of BRICS countries to 10.
On August 24, 2023, Chinese President Xi Jinping meets with Iranian President Ebrahim Raisi on the sidelines of the 15th BRICS Summit in Johannesburg, South Africa. (Xie Huanzhi/Xinhua News Agency, via Getty Images)
Rising oil prices have caused several rifts within the BRICS. China's booming oil trade with Iran hit a snag this week after Iran withheld shipments of crude oil demanding higher prices.
China currently obtains about 10% of its crude oil from Iran, taking advantage of discounted prices due to Western sanctions on Iranian products. Iran agreed in November to sell Chinese crude oil at a discount of about $10 a barrel, already a step below the $13 discount enjoyed by Chinese buyers. In December, Iran changed its mind and said it would only offer a discount of $5 to $6 per barrel.
Chinese executives Said Reuters said it was not happy with Iran changing the terms of the oil deal.
The price increase order clearly came from the headquarters in Tehran, as this is considered a widespread default and also curbs supply to intermediaries,” said a China-based trade executive.
An executive at a Chinese intermediary that sources directly from Iran said there was an “impasse” between Chinese buyers and Iranian suppliers as OPEC producers were “holding back some shipments.” Ta.
“It's not clear how things will end,” the official said. “Let's wait a little bit and see if the refineries accept the new price.”
Reuters cited reports that some shipments from Iran had been halted until Chinese customers agreed to pay new, higher prices. One Chinese refiner based in Shandong province has already given in and agreed to lower discounts on several ships of crude.
Oil buyers in Shandong province say they know that “the new price is too high” but that “the Iranian side is very assertive” and that China has few good alternatives to quickly replace Iranian crude. Told. One peculiarity of this deal is that Iranian crude oil is disguised as coming from third parties, such as Malaysia, and is purchased primarily by small, independent “teapot” refineries. This is a neat, small-scale sanctions-evasion operation that China's independent refiners are reluctant to disrupt.
Russian President Vladimir Putin toasts while participating virtually at the opening ceremony of the BRICS Business Forum via video conference, Thursday, June 23, 2022, in Moscow, Russia. (Mikhail Metzel/Sputnik, Kremlin Pool) Photo via AP)
Meanwhile, India is also hungry for oil and is buying large quantities of Russian crude at deeply discounted prices. Prices in Russia also fell due to sanctions, but creep up Up Recently, the price has been below $2 per barrel of Iraqi crude oil.
Russia remains India's biggest supplier, but India shifted a significant portion of its operations to Iraq last month, with purchases from Iraq exceeding 1 million barrels a day for the first time in almost a year.
Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri said on Wednesday: was fired Rumor has it that India has cut its supply of Russian crude oil because sanctions on Russia have made it difficult to process payments.
“The Indian leadership has only one demand: that Indian consumers get energy without disruption and at the most economical price,” Puri said, adding, “If India doesn't give us a discount,” why not? I asked if I had to buy Russian crude oil.
Contrary to Mr. Puri's comments, ship tracking data Indicated Five tankers carrying Russian Sokol-class crude oil suddenly stopped leaving Indian ports in late December after the United States sanctioned several vessels for violating sanction price caps. A sixth tanker has been anchored off the coast of Sri Lanka for months, with India debating whether to risk sanctions by allowing it to berth and unload its cargo.
