MOSCOW: After several governments in the West imposed economic sanctions on Russia after it invaded Ukraine, Russian offered discounts on its oil and China grabbed the offer.
When some foreign governments and companies imposed sanctions, Russia was left with fewer buyers. So to counter that, it started offering discounts on oil to countries. China has been most active in grabbing the offer. China was one of the largest buyers of Russian oil even before the Ukraine war. But, once the Russian attack on Ukraine started, Beijing's purchases of oil from Moscow only increased.
Although China chose not to condemn Russia's attacks on Ukraine for economic interests publicly, it has called for an early end to the war trying to act as a friend to both Ukraine and Russia.
Observers are expecting China to continue with the present course, reported Portal Plus. China has defended the purchase of oil from Russia, saying it must source crude oil from wherever it is available at a cheap rate.
China also continues to buy oil from the Middle East as well as Angola and Brazil, although in July, Russia remained its top supplier for the third month in a row.
From March to May, China bought 14.5 million barrels of oil, which marks a three-fold increase from the same period last year.
Portal Plus reported quoting Asia Times that prices for global oil had collapsed by more than 60 per cent since the start of 2020 due to the one-month-long oil price war between Russia and Saudi Arabia, the world's second and third largest oil producers.
The adverse impact of the Covid-19 pandemic on the global economy had knocked oil prices and futures contracts down to levels not seen in decades.
Under the current scenario, diplomatic relations between Russia and China are getting stronger by the day as Russia has been becoming totally dependent on China.
The reason why China has become so crucial for Russia is the fact that the bulk of Western sanctions has left Moscow with no other option than allow China in becoming its largest market, Portal Plus said quoting Ukrainian analysts. China's imports from Russia have jumped a record 80 per cent in May last year.
However, China too is experiencing financial difficulties due to its COVID-19 lockdowns and property crisis. So, if it gets an opportunity to fill in its soil reserves by purchasing cheaper oil, it will definitely use that opportunity.
"Lots of these things can be done more constructively behind the scenes than in the limelight", Portal plus quoted China expert Victor Gao, a professor at China's Soochow University and vice president of the Center for China and Globalization as saying.
"As this relationship develops, Russia's position will become weaker, hence China will be pushing for higher discounts on Russian oil and gas exports", he added.
The European Union is expected to impose further sanctions on Russia in the coming December. It is expected to include a ban on insurance for tankers transporting Russian oil. A price cap on Russian oil is also expected later, reported Portal Plus.
So, the situation provides China with an upper hand while negotiating oil prices with Russia and demand more discount on oil and it will ensure grabbing the opportunity with both hands. (ANI)
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