By Andrew Hayley
       BEIJING, Jan 20 (Reuters) - Russia leapfrogged Saudi
Arabia to become China's top crude oil supplier in 2023, data
showed on Saturday, as the world's biggest crude importer defied
Western sanctions to purchase vast quantities of discounted oil
for its processing plants. 
    Russia shipped a record 107.02 million metric tons of crude
oil to China last year, equivalent to 2.14 million barrels per
day (bpd), the Chinese customs data showed, far more than other
major oil exporters such as Saudi Arabia and Iraq.
    Imports from Saudi Arabia, previously China's largest
supplier, fell 1.8% to 85.96 million tons, as the Middle East
oil giant lost market share to cheaper Russian crude.
    Shunned by many international buyers following Western
sanctions over the Kremlin's 2022 invasion of Ukraine, Russian
crude oil traded at significant discounts to international
benchmarks for much of last year amid a Western-imposed price
cap.
    Accelerating demand from Chinese and Indian refiners for the
discounted oil boosted the price of Russian ESPO crude through
2023, pushing past the Group of Seven's $60 a barrel price cap
imposed in December 2022 as alternative shipping and insurance
options to circumvent the sanctions proliferated.
    
     ESPO crude shipments for December delivery were priced at a
discount of around 50 cents to 20 cent per barrel to the ICE
Brent benchmark, versus a $1 premium for October delivery
cargoes and a discount of $8.50 for shipments delivered in
March, according to trading sources.
    At the same time, Saudi Arabia raised prices for its
signature Arab Light from July, pushing some refiners to look
for cheaper cargoes.
    To support prices, Saudi Arabia and Russia, two of the
world's top three oil producers, announced output and export
cuts last year. Saudi Arabia is rolling over output cuts of 1
million bpd this quarter, while Russia said it would deepen its
cut in exports this year to 500,000 bpd from 300,000 bpd.
    Chinese refiners use intermediary traders to handle the
shipping and insurance of Russian crude to avoid violating the
Western sanctions. 
    Buyers also use the waters off Malaysia as a trans-shipment
point for sanctioned cargoes from Iran and Venezuela. Imports
tagged as originating from Malaysia climbed 53.7% last year.
    China reported no official shipments of Venezuelan crude in
December despite an easing of U.S. sanctions on Caracas in
October following a deal between President Nicolas Maduro's
administration and its political opposition. 
    Shipments to China from the U.S. last year surged 81.1% last
year despite geopolitical tensions between Beijing and
Washington as U.S. crude production increased.
    China's overall crude imports for 2023 rose to a record of
563.99 million metric tons, equivalent to 11.28 million bpd.
    Here is the detailed trade breakdown, with volumes in
million metric tons and on-year percentage change calculations
by Reuters:    
    
  Country        December      % Change  2023 Total     YTD %
                                                        Change
   Russia       9,561,014       47.78    107,024,517    24.10
   Saudi        5,986,945       -15.88   85,959,144     -1.75
    Iraq        5,129,418        1.37    59,260,931      6.80
  Malaysia      4,646,324       -15.80   54,792,821     53.72
   Oman         3,942,273       13.59    39,146,889     -0.56
    UAE         3,635,906       -26.58   41,816,902     -2.22
   Brazil       3,479,242       16.62    37,745,888     51.40
   Angola       3,035,928       18.23    30,028,071     -0.20
   Kuwait       1,912,859       -30.94   24,533,168     -26.29
     US         1,156,576       67.97    14,287,367     81.06
   Iran             NA            NA         NA           NA
 Venezuela          NA            NA         NA           NA
 (metric ton = 7.3 barrels for crude oil conversion)
    

    
 (Reporting by Andrew Hayley in Beijing and Muyu Xu in
Singapore; Editing by William Mallard)