China is seeking to replenish its strategic crude stockpiles with cheap Russian oil, a sign Beijing is strengthening its energy ties with Moscow just as Europe works toward banning imports due to the war in Ukraine.
Beijing is in discussions with Moscow to buy additional supplies, according to people with knowledge of the plan who asked not to be named as the matter is private. Crude would be used to fill China’s strategic petroleum reserves, and talks are being conducted at a government level with little direct involvement from oil companies, said one person.
Oil has rallied this year following Russia’s invasion of its smaller neighbor, but the price of its own crude has tumbled as buyers step away to avoid damaging their reputation or being swept up in financial sanctions. That’s provided an opportunity for China to cheaply replenish its vast strategic reserves, which are typically tapped during times of emergencies or sudden disruptions.
“China and Russia always engage in normal economic cooperation and trade on the basis of mutual respect, equity and mutual benefit,” Chinese Foreign Ministry spokesman Wang Wenbin said at a regular press briefing on Friday. “I want to stress that unilateral sanctions are not conducive to resolving issues, but constitute defiance of the existing economic system and rules.”
In order to deal with skyrocketing oil and gas prices, China has organized various ways to import the fuels, the National Development and Reform Commission said in statement on Thursday. The foreign ministry for Russia didn’t immediately respond to a request for comment.
Details on volumes or terms of a potential deal haven’t been decided yet, and there’s no guarantee an agreement will be concluded, said one person.