According to Reuters article published on May 11, 2023, for Chinese independent refiners who have been avid buyers of cheap Russian crude in the aftermath of sanctions on Moscow, intermediaries have played a key role as the trade has switched from dollar settlement to China's yuan, industry sources said.
While big state energy importers often enjoy open credits from Russian counterparts when paying in yuan, independents with limited credit lines have been using yuan bank credits or cash for oil purchases, facilitated by the intermediaries who have flourished providing bridge financing.
The firms, such as local government-backed commodities traders Shandong Port International Trade, Zhejiang Materials Industry Group and Xiamen C&D, have brought Russian cargoes into tax-bonded storage and sold on demand to refiners, charging a premium plus interest for financing, traders and refinery sources say.
Xiamen C&D didn't immediately comment. Calls to Shandong Port International Trade went unanswered. Zhejiang Materials didn't respond to requests for comment.
"It's a safer way for us as it becomes more like a domestic yuan-based trade. It also eases our financial burden," said a purchasing manager with an independent refiner, declining to be identified as he was not authorised to speak with media.
The discounts on Russian oil often more than compensate for the additional financial cost, the manager added.
These intermediaries offered similar services when trade was settled in dollars, but they are handling bigger volumes of sales than before, traders and refinery sources said.
