Reuters: China prepares to buy Russian oil again after several months of hiatus

Chinese state-owned companies are preparing to buy Russian oil again after a break of several months. The reason is the risk of shortages amid the war in the Middle East and the temporary easing of sanctions by the United States.

Reuters reports this, citing sources.

According to the agency, units of some of the countryʼs largest energy companies, “Sinopec” and “PetroChina”, have already approached suppliers about possible purchases. If deals are made, it would be the first resumption of imports since November.

There are no contracts yet, but Reuters sources say they could be coming soon. Despite rising prices due to the US-Iran war, Russian oil is still cheaper than alternatives, including from Brazil and West Africa.

Companies are now assessing how to pay for and deliver the oil within the 30-day sanctions relief period that began on March 12 and applies to shipments already shipped.

At the same time, the interlocutors do not rule out that large Chinese companies will buy oil through intermediaries — independent refineries or traders. According to sources, some of them are even ready to resell the raw material, because it is more profitable than processing it.

This is particularly true of Russian ESPO crude oil, which is supplied from the Far East. It was recently offered at a premium of almost $8 per barrel to the benchmark Brent crude oil. For comparison: Brazilian oil is even more expensive, with a premium of $12-15.

• On March 12, the US Treasury Department allowed the export of already shipped Russian oil for 30 days, which partially eased the situation on the market.

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