China plans to restock its strategic crude oil reserves with more affordable Russian oil.
This is an indication that Beijing is strengthening its energy ties with Moscow just as Europe works toward banning imports due to the war in Ukraine, reports Bloomberg.
Beijing is in discussions with Moscow to buy additional supplies, disclosed sources on condition of anonymity.
Crude would be used to fill China's strategic petroleum reserves, and talks are being conducted at a government level with little direct involvement from oil companies, said one person.
Oil has rallied this year following Russia's invasion of its smaller neighbor, but the price of its own crude has tumbled as buyers step away to avoid damaging their reputation or being swept up in financial sanctions. That's provided an opportunity for China to cheaply replenish its vast strategic reserves, which are typically tapped during times of emergencies or sudden disruptions.
The foreign ministries for both China and Russia didn't immediately respond to requests for comment.
Details on volumes or terms of a potential deal haven't been decided yet, and there's no guarantee an agreement will be concluded, said one person.