China is seeking to replenish its strategic crude stocks with low-cost Russian oil, a hint that Beijing is fortifying its energy links with Moscow at a time when Europe is considering restricting imports due to the Ukraine conflict.
Beijing is in discussions with Moscow to buy additional supplies of crude, according to people with knowledge of the plan. Talks are being conducted at a government level with little direct involvement from oil companies. Oil has rallied this year following Russia’s invasion of its smaller neighbor, but the price of its own crude has tumbled.
Refiners in China quietly buy Russian crude since the invasion, even as a Covid-19 resurgence dents consumption in the world’s biggest crude importer. Apparent oil demand last month slumped 6.7% year-on-year as strict lockdowns confined millions to their homes. Some forecast China has the capacity to store more than 1 billion barrels of combined commercial and strategic stockpiles.