China has quietly ramped up purchases of Russian oil at lower-than-normal pricesfilling the void left by several countries as they cut ties with the Kremlin in response to its invasion of Ukraine, a new report says.
China’s imports will increase to 1.1 million barrels per day for the month of May, up from 750,000 bpd in the first quarter of 2022, according to shipping data obtained by Reuters. The move is a reversal from a decision made by Chinese officials last month to cut back on import supplies from Russia, as the country didn’t want to appear as if it supported Russia’s attacks in Ukraine and open itself up to retaliatory sanctions from the West.
INDIA HAS BOUGHT TWICE AS MUCH OIL FROM RUSSIA SINCE INVASION THAN ALL OF 2021
The purchases fill the gaping hole left by Western countries that cut off imports from Russia after its invasion in late February, causing the Kremlin’s prices to drop. Barrels of Russian oil have been marked down roughly $29 from their cost prior to the invasion, giving China a rare deal as it faces the consequences of a slowing economy.
Although some Asian countries have increased purchases of Russian oil in the last few months, it’s likely not enough to offset the major losses from Western sanctions and bans, analysts have said.
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Russia has braced itself for further retaliation. The European Union is set to finalize another round of sanctions against the Kremlin, which includes a ban on Russian oil purchases. The EU has also floated ideas of banning Russian oil imports completely by the end of the year, which would force the country to cut its crude production altogether.
However, that plan would require unanimous approval from all 27 EU member states, and Slovakia and Hungary, which are both deeply dependent on Russian oil supplies, would need to be convinced.