The Strategist

China is in talks with Russia to buy oil

05/20/2022 - 08:23

China is in talks with Russia to buy more oil to replenish its strategic reserves, Bloomberg sources said. Negotiations are conducted at the level of the governments, while oil companies are hardly participating in them.

China is in talks with Russia to buy oil
Beijing is in talks with Moscow to buy more oil in Russia, informed sources told Bloomberg. They specified that additional oil is needed to replenish China's strategic oil reserves.

One of the interlocutors stressed that the negotiations are conducted at the government level, participation of oil companies in them is insignificant. Another noted that the volume of supply and other terms of the potential deal have not yet been determined and there is no guarantee that the agreement will be concluded.

World oil prices went up after the start of the conflict in Ukraine (a barrel of Brent oil was sold for $107.99 on May 19). Meanwhile, Russian Urals crude has fallen in price ($86.75 per barrel as of May 17) due to buyers' reluctance to damage its reputation and face sanctions from the West, the agency points out. This gives China an opportunity to replenish its strategic reserves cheaply, Bloomberg notes.