- Though oil prices are on the rise across the globe, China is seeing prices fall.
- Western sanctions against Russia have left Moscow willing to unload its crude at mind-bending discounts.
- China is taking advantage of the current geopolitical climate, buying up as much Russian oil as it can.
“And the sixth angel poured out his vial upon the great river Euphrates; and the water thereof was dried up, that the way of the kings of the east might be prepared.” Rev. 16:12
When the Trump administration slapped sanctions on Venezuela and Iran, China became the largest buyer of these countries’ crude oil despite repeated warnings by Washington officials—and not just warnings but action, too—that there is such a thing as secondary sanctions.
Now, China has also become an even bigger buyer of oil from the world’s biggest exporter, incidentally the subject of not just U.S. but European Union sanctions, too. And while oil prices for most of the world are rising, for China, they are falling.
Bloomberg reported this week that Iran has had to cut the price of its already discounted crude in order to be able to compete with Russian crude sent to China. The market is important for Iran, as it is one of very few where its crude is accepted amid the still continuing U.S. sanctions.
“The only competition between Iranian and Russian barrels may end up being in China, which would work entirely to Beijing’s advantage,” said energy analyst Vandana Hari, as quoted by Bloomberg. “This is also likely to make the Gulf producers uneasy, seeing their prized markets taken over by heavily discounted crude.”
This might hint at the possibility of discord within OPEC+, but then again, it will take a while for such discord to manifest itself. Meanwhile, Iran, per the Bloomberg report, is cutting its oil prices to some $10 per barrel below the Brent benchmark to compete with Urals, which has comparable properties and which Russia heavily exports to China.
The main buyers of both Iranian and Russian crude are the private refiners in China …
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