China plans joint oil purchase

China Petroleum & Chemical, PetroChina, Cnooc and Sinochem, chinese state-owned oil sector, are planning to form a group of input buyers aiming to increase their power if trading and decrease competition.

According to sources, executives from the four companies would be in final negotiations of the plan. Moret, the proposal would also have gained support from the government of China and relevant regulatory sectors in the sector. When chinese group hopes to have more voice and bargaining power.

Among the claims of the new group are the offers in for russian and african oil types in the spot market, for example. It is not yet known how the agreement will take place, but the group represents importing refineries more than 5 million barrels of oil per day. In theory, with the agreement, the group would become the largest oil buyer in the world, with a volume of almost 20% of the total production of the Organization of Petroleum Exporting Countries (OPEC).

It is worth remembering that China is moving towards a recovery after the crisis of the new coronavirus. At the moment, the market is almost at pre-virus.

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