China Decided to Create the World’s Largest Oil Buyer
OREANDA-NEWS. Several Chinese state oil refineries, including China Petroleum & Chemical Corp. (Sinopec), Sinochem, PetroChina and China National Offshore Oil Corporation (CNOOC) are holding talks to form a group for joint oil purchases abroad.
This is reported by Bloomberg agency, citing its sources. According to the publication, the formation of such a union has already received approval from the Chinese authorities, including regulatory bodies.
Representatives of companies that import a total of 5 million barrels of oil per day take part in the negotiations. Bloomberg notes that the merger of these companies on the issue of procurement policy would lead to the creation of the world’s largest oil buyer. This would give the companies involved in the deal the opportunity to avoid price wars among them and influence the price offered by suppliers.
It is noted that the reason for the attempt by the Chinese oil refineries to form a purchasing alliance is the increase in prices for raw materials in the spot market after the economy of the country began to recover from the crisis connected to COVID-19 epidemic.с