As India reduces its Russian oil imports, China — under President Xi Jinping — has emerged as the biggest beneficiary, securing heavily discounted crude from both Russia and Iran amid a supply glut and limited global buyers.

Why China Is Gaining

With India cutting back purchases, a significant portion of Russian crude has been redirected eastward to China.

According to Rystad Energy, India’s imports from Russia could drop by nearly 40%, falling to around 600,000 barrels per day. This shift has intensified competition between Russian and Iranian suppliers targeting Chinese refiners.

Deepening Discounts

Traders report:

Russia’s Urals crude selling at nearly $12 below ICE Brent (up from a $10 discount last month)
Iran’s Light crude offered at up to $11 below global benchmarks (previously $8–9 discount)

The pricing battle reflects shrinking global markets for sanctioned oil.

China’s Refining Limits

Much of the crude is being absorbed by China’s independent refiners, often called “teapots.” However:

They represent roughly 25% of China’s total refining capacity
Capacity utilization is nearing saturation
Sanctioned barrels are accumulating in onshore and offshore storage

Analyst Jianan Sun of Energy Aspects, speaking to Navbharat Times, noted that private refiners “cannot take much more.”

State-owned Chinese refiners have largely avoided Iranian crude and recently distanced themselves from Russian trade, further limiting absorption capacity.

Pressure on Russia and Iran

Both oil producers face mounting constraints:

Russia has reportedly cut production, impacting revenue amid the Ukraine war
Iran is racing to maximize exports amid fears of tighter sanctions or potential U.S. action

With few major buyers left, both nations are increasingly dependent on China.

Strategic Implications

For China:

Access to cheaper energy
Strengthened leverage over sanctioned suppliers
Improved energy security

However, physical storage limits and refinery bottlenecks could restrict further gains.

Key Entities

Xi Jinping – President of China benefiting from discounted crude inflows
Rystad Energy – Reported decline in India’s Russian imports
Energy Aspects – Analysis on refinery capacity limits
Navbharat Times – Published analyst commentary
Russia – Discounted crude supplier
Iran – Competing discounted crude supplier
China – Primary buyer of sanctioned oil
India – Reduced Russian oil imports

Final Verdict

China has capitalized on shifting global oil flows, leveraging reduced Indian demand and sanctions pressure to secure record discounts from Russia and Iran. While Beijing enjoys short-term economic and strategic advantages, refinery constraints and storage saturation may limit how much more discounted oil it can absorb.