A deal's a deal

As the EU works toward banning Russian energy imports (increasingly unclear what this means anymore) in response to the war in Ukraine, China is getting ready to hit the oil equivalent of a warehouse sale. 

What happened: The cost of oil has hit record highs this year, but Russia’s own crude has tumbled as buyers step away to avoid tarnishing their image or getting hit by sanctions, per Bloomberg, leaving China with an opportunity to replenish its strategic reserves. 

While there’s no guarantee an agreement will be reached, China has an estimated capacity to store over 1 billion barrels in commercial and strategic reserves (enough to last 70 days by some estimates) and could also be sitting on a surplus due to recent COVID lockdowns.

Why it matters: Impacts of sanctions are starting to show in Russia, with economic growth slowing and experts predicting a recession. Oil and gas account for about half of the country’s exports, so as long as there are willing buyers (including China and India), Russia may be able to keep the central piece of its economy relatively intact.