Recent data shows that China is strategically strengthening its oil stocks. For several months, the Middle Kingdom has taken advantage of its partnership with Russia for this purpose. Some believe that this is a way for China to expand its influence within the BRICS.
The reinforced oil hoarding of the Chinese member of BRICS!
China, an important BRICS member, is taking advantage of falling crude prices to strategically accumulate additional oil stocks. This is what consistent sources report, according to which the country would benefit from the sanctions imposed on Russia for this purpose.
Thanks to these, China acquired cheap crude oil from its BRICS counterpart, forced to sell its resources to it at reduced rates. A movement which began in October 2023 and which favored China.
Indeed, this maneuver had the effect of making the Chinese yuan the most traded currency in Russia for trade-related activities. This, with transactional benefits for the Chinese ogre which has accumulated a substantial six-month stock thanks to the increase in its purchases of Russian oil.
While China notably refrains from making its strategic oil stocks public, questions are emerging. Some analysts suspect this influential BRICS member of practicing a certain strategic hoarding. As proof, in December 2023 alone, China managed to accumulate a staggering 1.39 million barrels of oil per day. A significant escalation from the 20,000 barrels per day stored in November.
A Chinese approach that is not at all harmless?
Throughout 2023, China has accumulated an average of 760,000 barrels of crude oil per day. According to an oil trader, China strategically sources oil from all over the world, except from the United States where freight rates are exorbitant.
This choice is not a coincidence, because with the rise in oil prices and the strengthening of demand, China has the possibility of exploiting its strategic oil reserves by selling them to other countries, thus making profits substantial.
But ultimately, this approach seems strategically linked to the desire of the BRICS to put an end to the dollar. Indeed, some analysts suggest that China, along with other BRICS members, could exert influence in this direction.
BRICS could force countries to settle oil payments in Chinese yuan rather than US dollars. This could allow the Middle Kingdom to position itself as a key player in global oil dynamics. Without forgetting that the country has been suspected of wanting to strengthen its role within BRICS.
As a reminder, the alliance is actively working on issuing a common currency. A currency whose digital possibilities, particularly in crypto, have been discussed throughout the months that have passed.
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