With deep discounts, independent Chinese companies start buying Russian oil

The Financial Times revealed that the independent refineries in China are buying Russian oil at deep discounts as Western countries consider suspending their purchases and explore possible war embargoes in Ukraine.

In detail, an official from an independent refinery in Shandong said that since the beginning of the war in Ukraine had not announced deals with Russian oil suppliers to avoid US scrutiny and exposure to sanctions.

The official added that the refinery had acquired a stake in Russian crude through commodity trading companies prime state-owned, which are seen as representatives of Beijing, and had mostly refused to sign new supply contracts.

Other offers

The paper revealed that several ships had been loaded with Russian crude, while shipping brokers say other deals may have been privately arranged.

Brian Gallagher, head of investor relations at the Euronave Belgian oil group, said incorporating Russian oil in larger ships for transportation in Asia is “unusual”. But with a $ 35 a barrel discount on Brent crude, China’s refineries have the urge to buy.

Referring to the stagnation in demand for oil induced by the shutdown, Gallagher said: “They don’t need it now but they can store it and shipping provides a flexible mechanism.”

.vjs-texttrack-settings {display: nobody;}

China thirsty for energy

Many Western companies do auto- sanction or struggle to provide insurance, goods or financing for the purchase of exports of materials prime Russia, raising expectations that energy-hungry China will step in and buy unsold barrels.

Purchases from independent refineries in China reveal how some importers are bypassing traditional access to cheap Russian oil.

China’s closures, logistical and financial challenges due to sanctions against Russia, and the risk of secondary US sanctions have dampened the appetite of Chinese state-owned refineries for any significant increase in purchases of Russian crude.

.vjs-texttrack-settings {display: nobody;}

But shipping activity indicates a modest increase in Chinese purchases. Maritime intermediaries and operators claim that at least 6 supertankers – each in capable of transporting up to 2 million barrels of crude oil – have concluded agreements to consolidate Russian Urals crude shipments in Europe for shipping in Asia, mostly too in China and India. Some Ural drums may be of Kazakh origin.

It is reported that the United States and the United Kingdom have banned Russian oil, while the European Union is in discussion of prohibitions and restrictions.

From 15 May, the merchants of raw materials prime in the European Union e in Switzerland will not be able to sell barrels of Rosneft in nowhere else in the world.

Read More About: World News