China is now in talks with Russia to buy additional supplies, anonymous sources report to Bloomberg news agency. Russia’s neighbors’ crude oil must replenish Beijing’s strategic reserve. Talks are underway at government level, with limited direct involvement from the oil companies themselves, one of the sources said.
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China can realize a good deal with Russian oil. While the war in Ukraine has caused global oil prices to rise sharply, the price of Russian oil has fallen sharply. Many buyers avoid the stuff because of potential reputational damage or the financial sanctions against the country. In other words, China would replenish its own large reserves at an advantageous price. The country uses those reserves in case of emergencies or supply problems.
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Both foreign ministries declined to comment. Details on volumes and price of a potential deal have not yet been decided and there is no certainty that an agreement will be reached, a source said.
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The US and Britain have already announced an oil ban and it is still being negotiated in the EU, but Hungary is thwarting. Meanwhile, there are enough buyers in China and India.
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