Beijing is in discussions with Moscow to buy additional oil supplies, Bloomberg reported this week, citing people with knowledge of the plan. China is seeking to replenish its storage tanks with discounted Russian crude before prices rise again, they said.
According to the sources, who asked not to be named, details on volumes or terms of a potential deal haven’t been decided yet, and there’s no guarantee an agreement will be struck.
“There is still room to replenish stocks and it would be a good opportunity for them to do so, if they can be sourced on commercially attractive terms,” Jane Xie, a senior oil analyst at data and analytics firm Kpler, told the outlet.
Kpler estimates China’s overall stockpiles at 926.1 million barrels, up from 869 million barrels in mid-March, but still 6% lower than the record in September 2020.
Traders told Bloomberg earlier that China’s oil refiners have been discreetly buying cheap Russian crude. They said that Russian crude sellers have offered Chinese buyers the flexibility to pay in yuan.
Some Western countries, such as the US and UK, have recently vowed to abandon Russian oil imports as part of their economic sanctions. The EU is also discussing this move. Meanwhile, Asian buyers, particularly India and China, have seized the opportunity to replenish their reserves with heavily discounted Russian oil.
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