BRICS member China is taking undue advantage of lower crude oil prices by stockpiling 1.39 million barrels every day. China hoarded cheap crude oil from Russia as the country was sanctioned and forced to sell it at discounted prices. The sanctions against Russia are a blessing in disguise for China as it has been accumulating crude oil since October 2023. China is benefiting from its BRICS counterpart Russia as both countries are initiating oil deals in local currencies.
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The move has made the Chinese Yuan become the most traded currency in Russia for trade. In December last year, China aggressively boosted its oil purchases and now has a stockpile worth of six months. The Communist nation does not publicly report its strategic inventories leading to analysts believing that it is hoarding crude oil. Not just Russia, China is also buying cheaper crude oil from other developing countries around the world.
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BRICS: China Buying 1.39 Million Barrels of Oil Per Day
Reports state that BRICS member China accumulated 1.39 million barrels of crude oil every day in December 2023. That’s a sharp rise from the previous month as it purchased 20,000 barrels per day in November. The Chinese refiners continued to buy crude oil aggressively when the prices dipped last year. When the price of crude oil hit a high of $95 per barrel in September, China stayed away from accumulating it.
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On an estimate, BRICS nation China has accumulated 760,000 barrels of crude oil every day in 2023. “They snap oil from all over the world, except for the U.S. due to high freight rates,” said an oil trader to Reuters.
When the oil prices rise leading to robust demand, China could launder them to other countries reaping billions in profits. Stronger oil demand could come mid-2024 making China stand a chance to profit massively, said an oil trader. The BRICS members could also force countries to settle oil payments in the Chinese Yuan and not the U.S. dollar.