Lukoil has entered into an oil trade agreement with China to ship Arctic crude to the trading unit of the the China National Petroleum Corporation.
Lukoil’s trading unit Litasco sold a cargo of the Varandey blend to CNPC’s trading arm Chinaoil and the oil tanker, Korolev Prospect, made the voyage via the Northern Sea Route (NSR) from Murmansk to the Chinese port of Dongjiakou—a rare shipment to China via the Arctic instead of via the Suez Canal.
Warm summer allowed for tankers to travel through Arctic waters which are frozen for most of the year. The route via the Arctic is two times shorter in terms of nautical miles than a tanker voyage from Murmansk to a port in China via the Suez Canal, according to Refinitiv data cited by Reuters. The rare shipment via the Arctic was also made possible by the firmer prices of the key Russian blend ESPO preferred by Chinese independent buyers, which made the arbitrage via the Arctic route work, the sources told Reuters.
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