How China buys Russian oil at a low price


Kremlin leader Vladimir Putin and Chinese leader Xi Jinping at the Shanghai Cooperation Organization (SCO) meeting in Samarkand (Uzbekistan) in 2022. in September.
Getty/SERGEI BOBYLYOV

China is buying Russian oil at its biggest discount in months as the European Union tries to limit Moscow’s energy revenues.

At least one shipment of Russian Espoo light crude for December delivery sold at a discount of up to $6 a barrel to the Brent benchmark, four traders confirmed to Reuters.

Russia has rejected the EU and G7 price cap and threatened to retaliate by, for example, limiting the supply of its crude oil to participating countries, setting a price floor or imposing the highest discounts on its own crude oil.

When the European Union tries to limit Moscow’s energy income, it buys China Russian oil fell the most in months. Reuters reports, citing traders familiar with the business.

At least one shipment of Russian Espoo light crude for December delivery sold at a discount of up to $6 a barrel to the Brent benchmark, four traders confirmed to the news agency. This corresponds to a price of 68 USD per barrel.

While China has said it will not abide by the G7-EU cap on Russian oil, this could give it more negotiating power over oil deals, analysts at Rystad Energy said in a recent report.

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Sources told Reuters that Chinese and Russian oil traders are currently carrying out business as usual. The further price cuts come on fears of Chinese demand as a strict zero-tariff policy has slowed economic activity, although Beijing some relaxation signaled. Reuters also reports that Chinese refiners’ profit margins are shrinking.

“They don’t really care about the price cap. All they do is crunch the numbers to see if the prices given are good profits,” a refinery manager told the news agency.

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Russia has rejected the EU and G7 price cap and threatened to retaliate by, for example, limiting the supply of its crude oil to participating countries, setting a price floor or imposing the highest discounts on its own crude oil. However, according to Vanda Insights, the cap should not have a significant impact on Russian revenues.

This text was translated from English by Viktoria Bräuner. You can find the original here.

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