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Beijing, Moscow in talks on oil deal as China seeks to fill reserves with cheap Russian crude, report

Business Insider US
Russian President Vladimir Putin (L) gestures as he welcomes China's President Xi Jinping during an informal meeting in the Kremlin in Moscow on July 3, 2017. SERGEI CHIRIKOV/AFP via Getty Images
Russian President Vladimir Putin (L) gestures as he welcomes China's President Xi Jinping during an informal meeting in the Kremlin in Moscow on July 3, 2017. SERGEI CHIRIKOV/AFP via Getty Images
  • Talks are taking place at government level with limited oil company involvement, Bloomberg reported.
  • No volume of crude has been agreed upon and a deal isn't guaranteed, sources told the outlet.
  • The talks come as the EU plans to ban all imports of Russian crude oil.
  • For more stories go to www.BusinessInsider.co.za.

China is in talks with Moscow to buy cheap Russian oil for its strategic petroleum reserves, Bloomberg reported on Thursday.

Discussions between the two have been taking place at government level, with limited involvement from oil firms, people with knowledge of the situation told the newswire.

The volume of crude has not been determined and a deal isn't guaranteed to be signed, one source told Bloomberg.

While sanctions imposed against Russia following the Kremlin's decision to invade Ukraine taper Western demand for Russian crude, supplies have continued to flow to China and India, who have been able to buy the product at comparatively cheaper prices.

The EU has planned to ban all Russian imports of crude oil and refined products by the end of this year, while the US banned shipments in early March.

China is the world's largest crude importer and the biggest buyer of Russian oil, having imported nearly 1.6 million barrels a day of Russian crude in 2021, according to Chinese government data.

It's looking to build its reserves even though it is consuming less, as lockdowns amid a rebound of Covid-19 cases curb demand, Bloomberg reported.

"There is still room to replenish stocks and it would be a good opportunity for them to do so, if they can be sourced on commercially attractive terms," Jane Xie, a senior oil analyst at data and analytics firm Kpler told the newswire. 

The Chinese foreign ministry did not immediately respond to Insider's request for comment.


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