Sanctioned Russia becomes China’s main source of oil
Jun 21, 2022 - 10:33 AM
BEIJING, CHINA — China ramped up crude oil imports from Russia in May, customs data showed Monday, helping to offset losses from Western nations scaling back Russian energy purchases over the invasion of Ukraine.
The spike means Russia has overtaken Saudi Arabia to become China’s top oil provider as the West sanctions Moscow’s energy exports.
The world’s second-biggest economy imported around 8.42 million tonnes of oil from Russia last month — a 55 percent rise on-year.
Beijing has refused to publicly condemn Moscow’s war and has instead exacted economic gains from its isolated neighbour.
It imported 7.82 million tonnes of oil from Saudi Arabia in May.
China bought $7.47 billion worth of Russian energy products last month, about $1 billion more than in April, according to Bloomberg News.
The new customs data comes four months into the war in Ukraine, with buyers from the United States and Europe shunning Russian energy imports or pledging to slash them over the coming months.
Asian demand is helping to staunch some of those losses for Russia, especially buyers from China and India.
India bought six times more Russian oil from March to May compared with the same period last year, while imports by China during that period trippled, data from research firm Rystad Energy shows.
“For now, it is just pure economics that Indian and Chinese refiners are importing more Russian-origin crude oil… as such oil is cheap,” said analyst Wei Cheong Ho.
According to the International Energy Agency’s latest global oil report, India has overtaken Germany in the last two months as the second-largest importer of Russian crude.
China has been Russia’s biggest market for crude oil since 2016.
Days before Moscow’s invasion of Ukraine, China’s President Xi Jinping greeted his Russian counterpart Vladimir Putin in Beijing where the two countries declared a bilateral relationship of “no limits”.
Although demand in China remains muted due to Covid restrictions, there has been some improvement in the past month as cities loosen controls after the country’s worst outbreak since the early days of the pandemic.
This has allowed supply chain problems to ease and industrial production to pick up, official data shows.
China’s overall imports from Russia spiked 80 percent in May from a year ago to $10.3 billion, according to customs data.
Beijing’s purchases of Russian liquefied natural gas surged 54 percent on-year to 397,000 tonnes, even as overall imports of the fuel fell.
China has been accused of providing a diplomatic shield for Russia by criticising Western sanctions on Moscow and arms sales to Kyiv.
Once bitter Cold War rivals, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.
This month they unveiled the first road bridge linking the countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.
Last week Xi assured Putin of China’s support on Russian “sovereignty and security” in a call between the two leaders.
The Kremlin said the pair had agreed to ramp up economic cooperation in the face of “unlawful” Western sanctions.
The West has implemented unprecedented sanctions on Russia in retaliation for its war in Ukraine, forcing Moscow to find new markets and suppliers to replace foreign firms that have left Russia following the invasion.
The 27-nation European Union agreed in late May to a package of sanctions that would halt the majority of Russian oil imports.
The United States has already banned all Russian oil but European nations are much more dependent on these imports.
Energy is a major source of income for Putin’s government, and Western nations are trying to isolate Moscow and impede its ability to continue the war.