- China reported 826 new cases on Wednesday and 935 on Tuesday, pushing the country's Covid-19 cases to a two-month high this week (BBG)
- While most of the outbreak has not affected big cities, lockdowns have been implemented in some neighborhoods, and as part of China's zero-Covid policy, major lockdowns and mass testing of large cities are anticipated to follow
- The lockdowns have hurt Chinese crude demand as the nation's June crude imports fell to a four-year low of 8.75 MMBbl/d which is 21.8% less than May imports of 45.83 MMBbl/d
- India has increased its purchases of crude from Russia's far eastern ESPO blend, a grade that Chinese oil refiners typically prefer
- Four vessels are transporting Russian ESPO oil to India, compared to three vessels in June and one in April, according to Vortexa
- The trade is typically not appealing to Indian buyers due to the long distance from the Russian loading port of Kozmino and the fact that ESPO crude cargoes are often transported by smaller vessels
- However, the lower cost compared to other grades from the Persian Gulf and West Africa is what likely prompted the purchase