China continues to buy up cheap Russian energy to replenish its strategic crude stockpiles.
Oil and gas prices have rallied globally. However, having been hard hit by the EU sanctions due to the Ukrainian crisis, Russian major energy suppliers had to cut prices to recover their losses. Moreover, the country could soon run out of storage capacity. In this situation, China can give Russia a helping hand. It has been ramping up purchases of Russia’s oil. Although supply volumes have increased, the profits have plummeted. This means that record oil supplies are shipped at extremely low prices. Nevertheless, it is reported in the media that the share of Russian gas in China's imports has risen sharply. Besides, China bought 80% more Russian liquefied natural gas (LNG) compared to 463,000 tons last year. The volume of LNG rose by 4% to 6.55 million tons. Although it may sound optimistic, the general picture looks rather gloomy. The total volume of liquefied natural gas supplied to China has dropped by more than a third due to a decline in demand amid the COVID-19 outbreak.
China is now in talks with Russia to purchase LNG at a substantial discount, although it already buys Russian oil at bargain prices.
