China added some downward pressure to oil prices this week when it clearly signaled its intent to buy more discounted Russian oil. Between China and India, Russia is racing to pivot towards Asia.
Up until now, it has been India whose purchases of heavily discounted Russian crude kept the markets guessing whether Moscow could pull off a comprehensive pivot to Asia. Yet this week, it was China making headlines, with Beijing launching direct government-to-government talks on buying discounted crude to ‘replenish strategic stocks’. This, despite the prospect of an impending Chinese reopening, added some downward pressure to oil prices as ICE Brent trended around $112 per barrel by Friday, OilPrice reports. According to a Bloomberg report, the Chinese government is in direct talks with Russian authorities to start buying additional supplies of crude that would be used to replenish China’s strategic inventories.
The Biden Administration plans to allow European companies still operating in Venezuela to divert more oil to the continent, while US oil major Chevron will be allowed to negotiate a resumption of activities in the Latin American country. The Iraqi oil ministry has reportedly appointed law firm Cleary Gottlieb Steen and Hamilton to approach oil and gas firms active in Iraqi Kurdistan to renegotiate their contracts and bring them in line with applicable Iraqi law, bypassing the KRG. Norway’s Equinor and ExxonMobil launched an expansion drive in the giant Bacalhau field, eyeing a second FPSO, potentially doubling the field’s 220,000 b/d peak capacity.