The world’s second-largest economy continues stockpiling cheap crude amid possible preparations for a geopolitical situation.

The People’s Republic of China imported record volumes of oil from Russia in the first half of 2023, taking advantage of its cheap crude amid Western sanctions and robust global production.

During January to June, China absorbed 11.4 million barrels of crude oil, which is 11.7% more year by year, according to customs data processed by the FT. 

In the oil imports structure, Russian oil accounted for 2.13 million barrels a day and Saudi Arabian oil accounted for 1.88 million barrels a day.

Lukoil and Rosneft were the largest Russian crude producers; Aramco is the top Saudi Arabian exporter. .

Compared with the unit price of Saudi Arabian crude, Russian oil sold for a discount of 9 dollars a barrel in late 2022 and 11 dollars a barrel in June. Analysts noted the discount on Russian oil was yet smaller than that on Iranian or Venezuelan products.

Chinese hunger for oil – an especially cheap Russian crude – is explained by Beijing’s plans to stockpile as much as it can while prices are low and later pump oil reserves it into exports, the report quoted Rystad Energy, a research group, as saying.

It claimed that China might be preparing to embrace something important from the geopolitical point of view, like a new major economic or military crisis in the future, such as the collapse of Russia or a conflict in Taiwan.