Bloomberg: China Wants Russian Oil for Strategic Reserves
China is trying to replenish its strategic crude oil stocks with cheap oil from Russia. This is reported by the Bloomberg news agency based on insiders.
Beijing is said to hold government-level talks with Moscow about additional purchases of Russian oil. Oil companies would have no direct involvement in the negotiations.
The foreign ministries of both China and Russia were not immediately available for comment on the alleged talks. Also, no details are yet known about the size or terms of the potential purchases and according to the insiders, it is not certain that an agreement will be reached.
The oil price has risen sharply this year due to the Russian invasion of Ukraine, but the price of Russian crude oil, on the other hand, has fallen. This is because many traders no longer dare to buy oil from the country because of fear of reputational damage from Western sanctions. The United States has already banned the import of oil from Russia. The European Union also wants a boycott of Russian oil this year.
In order to convince buyers, Russia offers its oil at a discount. That presents an opportunity for China to cheaply replenish its vast strategic oil reserves. These stocks can be used in emergency situations, such as sudden disruptions to the oil supply due to natural disasters or wars, for example.