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In a move that appears to defy Western powers, China may have eased economic sanctions against Russia by importing oil. According to the Reuters news agency, the Asian giant has increased its purchases of Russian crude in recent weeks.
According to the exclusive Reuters report, China is importing more crude oil than it needs due to a combination of a number of factors, including low refinery throughput rates, weak domestic demand and restricted exports of refined fuels, all this to increase the accumulation of reserves.
A report by the US publication ‘Bloomberg’, quoted by Reuters, indicates that China and Russia would have been in talks to purchase additional oil supplies in order to increase their strategic crude oil reserves.
These negotiations were carried out, according to the publication, with government representatives and had little direct participation from the oil companies.
Additionally, Reuters indicates that China would be taking advantage of a discount on a barrel of oil, to which Russia assigns a value of 29 dollars below the price it held prior to the invasion that began in February. This is due to buyers, mostly Westerners, who have stopped doing business with Moscow due to the incursion into Ukraine.
Additionally, many companies stopped buying oil, gas and other products from Russia for fear of being affected by the sanctions imposed by the United States, the European Union and other Western powers. In fact, China would have made the move a month after cutting its purchases from Russia for fear that its main oil companies would be sanctioned.
Russia is positioned as an important supplier
According to unofficial data, Russia supplies China with 15% of the oil it consumes. According to the publication, the daily rate of purchase is around 1,100,000 barrels for the month of May, a figure higher than the 750,000 barrels per day for the first quarter of the year.
On the other hand, China’s movement could affect the export of crude oil from Iran and Venezuela. Two business partners who will surely be looking for alternatives to offer their extractions at a low price.
Despite the oil purchase, uncertainty remains as to whether Chinese refiners will return to strong operation in the refined fuel export market.
Russia will review its participation in the WTO due to international sanctions
Since the invasion of Ukraine began, various Western countries, led by the United States and the European Union, have imposed a series of sanctions that, according to the Russian Ministry of Economy, will cause a contraction of 7.8% in 2022.
Russia announced that it will review the participation strategy within the World Trade Organization (WTO) due to sanctions. During a speech, President Vladimir Putin stated that his government has until June 1 to update his country’s role in said entity.
In another order of ideas, Russia has established mechanisms to be able to fulfill the obligations contracted and one of them has been the payment in rubles of its gas exports.
Poland and Bulgaria were the first two European nations to see gas supplies from Russia affected by not agreeing to pay for the shipment in rubles. Moscow has now threatened Finland, a country that has shown its intention to join NATO, with cutting off the flow for the same reason.
With Reuters and EFE
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