China set for record Russian oil imports as India cuts purchases

Threat of US strikes on Iran spook "teapots"

Urals as well as other export grades such as Sokol and Varandey piled onto regular shipments of Russia's flagship ESPO blend exported from the Far East port of Kozmino located closer to China, creating strong competition versus rival supplies from Iran. Independent Chinese refiners, known as teapots, are the world's largest consumers of US sanctioned oil from Russia, Iran and Venezuela.

"For the quality you get from processing Russian oil versus Iranian, Russian supplies have become relatively more competitive," said a senior Chinese trader who regularly deals with teapots.

ESPO blend last traded at $8 to $9 a barrel discounts to ICE Brent for March deliveries, while Iranian Light, a grade of similar quality, was last assessed at $10 to $11 below ICE Brent, the trader added.