Unidentified sources told Bloomberg News that China is now in talks with Russia to buy additional supplies. Crude oil for Russia’s neighbors should replenish Beijing’s strategic reserve. One of the sources said that talks are underway at the governmental level, with a limited participation of the oil companies themselves.
China can make a good deal with Russian oil. While the war in Ukraine caused world oil prices to rise sharply, the price of Russian oil fell sharply. Many buyers avoid things due to potential reputational damage or financial penalties against the state. In other words, China will replenish its large reserves at an affordable price. The state uses these reserves in case of emergency or supply problems.
The two foreign ministries declined to comment. A source said that details of the size and price of a potential deal have not yet been determined and there is no certainty that an agreement will be reached.
The US and Britain have already announced an oil embargo and it is still being negotiated in the European Union, but Hungary is trying to thwart it. In the meantime, there are enough buyers in China and India.
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