US, WASHINGTON (ORDO NEWS) — China will purchase a record 1.6 million tons of Russian oil over the next four weeks, taking advantage of low prices for Russian Urals oil combined with falling demand in Europe, traders said. Reuters.
Such volumes make up a new monthly record for Russian oil supplies to China, after they exceeded 1.2 million tons in January.
Such supplies are also considered a lifeline for Russian oil companies, which are trying to establish supplies to Europe, since the outbreak of coronavirus in the world has led to a serious drop in energy demand.
Against this background, one of Russia’s main competitors in the energy market – Saudi Arabia – has promised to flood the markets with cheap crude oil in the struggle for market share.
Shipments may also indicate that China is using a drop in oil prices to replenish its strategic reserves.
Wood Mackenzie analysts estimate China’s strategic and commercial oil reserves could reach 1.15 billion barrels in 2020, compared with 900 million in 2019 and just 200 million barrels in 2014.
Three traders of Urals grade oil reported that the Chinese company Unipec acquired about 800 thousand tons of oil in Baltic ports in the second half of March and about 500 thousand tons in early April.
Sources, speaking on condition of anonymity, reported that several other Chinese refiners had also placed requests for Urals grade oil. They declined to name potential buyers because of the need for confidentiality.
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