China buys cheap Russian oil in record volumes
China has taken advantage of falling demand for oil in Europe amid a coronavirus pandemic to replenish its reserves with oil from Russia. According to traders, China has already purchased 1.6 million tons of Russian oil for shipping by sea in the next four weeks, Reuters reported. At the same time, the Chinese are enjoying not only a drop in demand for oil in Europe, but also low prices for Russian raw materials.
According to traders, Russian oil companies are quite happy with orders from China. In addition to the expected recession in Western industrialized countries, Russian oil companies are affected by the price war with Saudi Arabia, which has flooded the global market with cheap oil in an attempt to expand its market share.
Experts believe that China's purchase of Russian oil may also indicate that China is using the collapse in prices to replenish its strategic oil reserves. Analysts from the consulting group Wood Mackenzie estimate that the volume of strategic and commercial oil reserves in China this year could reach 1.15 billion barrels. This volume is sufficient for the country's oil needs for 83 days.