As soon as India retreated, China made a big play, buying oil storage from Russia and Iran at throwaway prices, also got reduced.

News India Live, Digital Desk: A major upheaval is being witnessed in the global energy market. Due to trade agreements and strategic balance with America, India has drastically reduced the purchase of crude oil from Russia and Iran. Now China is taking direct advantage of this ‘step-back’ of India. Seizing this opportunity, China has started buying oil from Russia and Iran at huge discounts, which is bringing huge profits to its coffers.

Why did India reduce oil purchases?

According to a recent report by Bloomberg, India’s oil purchases from Russia are expected to decline by about 40 percent in February as compared to January.

US pressure and trade deal: India has started distancing itself from Russia and Iran keeping in mind its trade interests with America.

Payment and Restrictions: International sanctions and payment complications also forced India to change its strategy.

China’s ‘Profit Booking’: Russian oil available at $12 per barrel

After India’s withdrawal, China is the biggest buyer left for Russia and Iran. Taking advantage of this compulsion, China has made a huge bargain.

Heavy Discount: Russia now only wants China $12 per barrel Is selling oil at the rate of Rs. There has been a big drop of up to $10 per barrel in prices compared to last month.

Iranian oil game: Iranian ‘light crude’ is also available to China at around $11.

Storage full, no space left!

China is currently quenching its thirst with “discounted oil”. The situation is such that China has purchased oil equal to its entire refining capacity.

Record Import: China’s oil exports to Russia rose by 2 million barrels a day in the first 18 days of February, up 20 percent from January and 50 percent from December.

Where is the oil kept: China has now filled all the storage facilities (teapots and other depots) built inside and outside its country. Analysts say that now it is running out of space to store new oil.

Why trust Russia more than Iran?

Interestingly, China has now considered it safer to buy oil from Russia than from Iran.

Fear of attack on Iran: China fears that America may attack Iran’s oil facilities at any time, which may disrupt the supply.

Less Risk with Russia: Despite the Ukraine war, oil supplies from Russia are currently more stable and secure for China. This is why China has reduced its purchases from Iran by 12 percent compared to last year and has focused entirely on Russian oil.

This strategy of China is not only providing it cheap fuel amid the global energy crisis, but is also strengthening its economy.