China Locks Up 83% of ESPO Crude as Hormuz Disruption Reshapes Pacific Supply Routes
Chinese majors cleared all August Kozmino cargoes weeks early and pushed buying into September, cementing a dominant grip on Russia's Pacific crude stream.
China accounted for 83% of all ESPO crude purchased in the first seven months of 2026, cargo flow data show, a degree of concentration that reflects how sharply Beijing has repositioned its crude procurement since the Strait of Hormuz was disrupted in March.2
By late July (2026-07-24), all August-loading cargoes from Russia's Kozmino export terminal had already been committed, weeks ahead of the typical schedule. Chinese buyers, led by Unipec, moved earlier than usual as Middle East supply risks pushed refiners to secure alternative barrels before they were operationally needed. "Chinese oil majors led by Unipec have been snapping up Russian ESPO since July, with the latest disruption in the Middle East accelerating August and September buying," said Emma Li, lead China market analyst at Vortexa.2
China was absorbing roughly 1.4 million barrels per day of Russian crude in July, Vortexa data showed.2
The scale of the pivot becomes clearer against what ESPO buying was replacing. Chinese imports from the Middle East slumped to just 2 million barrels per day, Emma Li noted, down from around 3 million bpd in May 2026, already near decade-low levels before Hormuz risks mounted further. Refiners that relied on Gulf barrels for the bulk of their feedstock have had to reroute supply chains toward Russian Pacific crude.3
ICE Brent crude front-month was at $96.24 per barrel as of Thursday (2026-09-03), having failed to spike despite the supply disruption. The muted price response surprised many who forecast $150 or even $200 oil once Hormuz flows became impaired.3
China's own inventory management partly explains the ceiling. Before the conflict began, Beijing had accumulated an estimated 1.4 billion barrels across commercial and strategic storage; EIA data put the end-of-2025 figure at 1.397 billion barrels. That buffer allowed Chinese refiners to slash overall crude imports by as much as 40% in June 2026 versus pre-war run rates, effectively removing roughly 4 million barrels per day of import demand from international markets for an extended period.3
The IEA coordinated a 400-million-barrel release from member-state strategic reserves in parallel, adding further relief against a market that had already lost more than 10% of global crude supply.3
There is a complicating factor behind the ESPO surge. S&P Global Energy estimated Chinese oil demand in the second quarter of 2026 was down 1.6 million barrels per day year on year.4 The shift toward ESPO is happening against weakening domestic consumption, not rising throughput. Chinese refiners are buying more Russian crude because Middle East alternatives are unavailable, while their aggregate demand for crude remains under pressure.
That shapes the durability question around the 83% market share figure. If domestic demand does not recover, refiners purchasing forward into September risk accumulating crude faster than utilization rates can clear it. Independent Chinese producers were already dealing with squeezed margins as recently as June 2026, with Iranian crude being offered at discounts to Brent compared to premiums in May 2026, Rigzone reported, as input costs bit into refining economics.1
Goldman Sachs analysts, in a research note sent to Rigzone during the week of August 3 (2026-08-03), said the physical oil market is tightening with their global visible stocks counter drawing.4 For sellers at Kozmino, that supports the forward-buying momentum. But it also means the inventory cushion that has kept Chinese import demand artificially suppressed — and oil prices capped — is narrowing.
The October cargo schedule at Kozmino will show whether Chinese buyers extend their purchasing curve further or begin to pull back as the stockpile buffer thins.2,4