The ongoing conflict in Ukraine has resulted in a number of western countries stopping their business with Russia when it comes to the purchase of oil. The United States and a number of European countries are looking to stop the oil and gas imports completely dealing a major blow to the Russian economy. However, things can get better for Vladmir Putin as a Reuters report claimed that China is taking advantage of the situation by buying oil from Russia at bargain prices.
According to estimates by Vortexa Analytics, the report claimed that China’s oil imports can go up to a near-record 1.1 million barrels per day – up from 750,000 in the first quarter of 2022.
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The report further claimed that the purchases are being carried out by Unipec, the trading arm of Asia’s top refiner Sinopec Corp, and Zhenhua Oil, a unit of China’s defense conglomerate Norinco.
According to shipping data and various traders, the Reuters report also pointed out Livna Shipping Limited as the main shipper of Russian oil into China. This is a huge reprieve for Russia after Vitol and Trafigura, the worst’s biggest commodity traders, stopped buying oil from Russian producers.
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“The situation began taking a drastic turn after the exit of Vitol and Trafigura that created a vacuum, which could only be filled by companies that can provide value and are trusted by their Russian counterparts,” one Chinese trader, who asked not to be named, told Reuters.
It also helped China in getting the oil for extremely low prices – almost $29 less per barrel – as it enabled them to save money and redirect it to other sectors of their COVID-19 pandemic-hit economy.
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(With agency inputs)
